G.R. Nos.

L-10817-18 February 28, 1958

ENRIQUE LOPEZ, petitioner,
vs.
I!EN"E ORO#$, %R., a&' PL$Z$ "(E$"RE, IN!., respondents.
Nicolas Belmonte and Benjamin T. de Peralta for petitioner.
Tolentino & Garcia and D. R. Cruz for respondent Luzon Surety Co. !nc. "ose B. #acatan$ay for respondent Plaza T%eatre !nc.
FELI), J.*
Enrique Lopez is a resident of Balayan, Batangas, doing business under the trade name of Lopez-Castelo Sawmill. Sometime
in ay, !"#$, %i&ente 'rosa, (r., also a resident of the same provin&e, dropped at Lopez) house and invited him to ma*e an
investment in the theatre business. +t was intimated that 'rosa, his family and &lose friends were organizing a &orporation to
be *nown as ,laza -heatre, +n&., that would engage in su&h venture. .lthough Lopez e/pressed his unwillingness to invest of
the same, he agreed to supply the lumber ne&essary for the &onstru&tion of the proposed theatre, and at 'rosa)s behest and
assuran&e that the latter would be personally liable for any a&&ount that the said &onstru&tion might in&ur, Lopez further
agreed that payment therefor would be on demand and not &ash on delivery basis. ,ursuant to said verbal agreement, Lopez
delivered the lumber whi&h was used for the &onstru&tion of the ,laza -heatre on ay !0, !"#$, up to 1e&ember # of the
same year. But of the total &ost of the materials amounting to ,$2,233.43, Lopez was paid only ,25,4#4.35, thus leaving a
balan&e of ,#!,00!.63.
7e may state at this 8un&ture that the ,laza -heatre was ere&ted on a pie&e of land with an area of $0".!0 square meters
formerly owned by %i&ente 'rosa, (r., and was a&quired by the &orporation on September 23, !"#$, for ,$,555. .s Lopez was
pressing 'rosa for payment of the remaining unpaid obligation, the latter and Belarmino 9ustia, the president of the
&orporation, promised to obtain a ban* loan by mortgaging the properties of the ,laza -heatre., out of whi&h said amount of
,#!,00!.63 would be satis:ed, to whi&h assuran&e Lopez had to a&&ede. ;n*nown to him, however, as early as <ovember,
!"#$, the &orporation already got a loan for ,65,555 from the ,hilippine <ational Ban* with the Luzon Surety Company as
surety, and the &orporation in turn e/e&uted a mortgage on the land and building in favor of said &ompany as &ounter-
se&urity. .s the land at that time was not yet brought under the operation of the -orrens System, the mortgage on the same
was registered on <ovember !$, !"#$, under .&t <o. 66##. Subsequently, when the &orporation applied for the registration of
the land under .&t #"$, su&h mortgage was not revealed and thus 'riginal Certi:&ate of -itle <o. '-6"! was &orrespondingly
issued on '&tober 23, !"#0, without any en&umbran&e appearing thereon.
,ersistent demand from Lopez for the payment of the amount due him &aused %i&ente 'rosa, (r. to e/e&ute on ar&h !0,
!"#0, an alleged =deed of assignment= of his #25 shares of sto&* of the ,laza -heater, +n&., at ,!55 per share or with a total
value of ,#2,555 in favor of the &reditor, and as the obligation still remained unsettled, Lopez :led on <ovember !2, !"#0, a
&omplaint with the Court of >irst +nstan&e of Batangas ?Civil Case <o. #35! whi&h later be&ame 9-30@ against %i&ente 'rosa, (r.
and ,laza -heater, +n&., praying that defendants be senten&ed to pay him 8ointly and severally the sum of ,#!,00!.63, with
legal interest from the :ring of the a&tionA that in &ase defendants fail to pay the same, that the building and the land &overed
by 'C- <o. '-6"! owned by the &orporation be sold at publi& au&tion and the pro&eeds thereof be applied to said
indebtednessA or that the #25 shares of the &apital sto&* of the ,laza -heatre, +n&., assigned by %i&ente 'rosa, (r., to said
plaintiB be sold at publi& au&tion for the same purposeA and for su&h other remedies as may be warranted by the
&ir&umstan&es. ,laintiB also &aused the annotation of a noti&e of lis pendens on said properties with the 9egister of 1eeds.
1efendants %i&ente 'rosa, (r. and ,laza -heatre, +n&., :led separate answers, the :rst denying that the materials were
delivered to him as a promoter and later treasurer of the &orporation, be&ause he had pur&hased and re&eived the same on
his personal a&&ountA that the land on whi&h the movie house was &onstru&ted was not &harged with a lien to se&ure the
payment of the aforementioned unpaid obligationA and that the #25 shares of sto&* of the ,laza -heatre, +n&., was not
assigned to plaintiB as &ollaterals but as dire&t se&urity for the payment of his indebtedness. .s spe&ial defense, this
defendant &ontended that as the #25 shares of sto&* assigned and &onveyed by the assignor and a&&epted by Lopez as dire&t
se&urity for the payment of the amount of ,#!,00!.63 were personal properties, plaintiB was barred from re&overing any
de:&ien&y if the pro&eeds of the sale thereof at publi& au&tion would not be suC&ient to &over and satisfy the obligation. +t
was thus prayed that he be de&lared e/empted from the payment of any de:&ien&y in &ase the pro&eeds from the sale of said
personal properties would not be enough to &over the amount sought to be &olle&ted.
1efendant ,laza -heatre, +n&., on the other hand, pra&ti&ally set up the same line of defense by alleging that the building
materials delivered to 'rosa were on the latter)s personal a&&ountA and that there was no understanding that said materials
would be paid 8ointly and severally by 'rosa and the &orporation, nor was a lien &harged on the properties of the latter to
se&ure payment of the same obligation. .s spe&ial defense, defendant &orporation averred that while it was true that the
materials pur&hased by 'rosa were sold by the latter to the &orporation, su&h transa&tions were in good faith and for valuable
&onsideration thus when plaintiB failed to &laim said materials within 65 days from the time of removal thereof from 'rosa,
lumber be&ame a diBerent and distin&t spe&ie and plaintiB lost whatever rights he might have in the same and &onsequently
had no re&ourse against the ,laza -heatre, +n&., that the &laim &ould not have been refe&tionary &redit, for su&h *ind of
obligation referred to an indebtedness in&urred in the repair or re&onstru&tion of something already e/isting and this &on&ept
did not in&lude an entirely new wor*A and that the ,laza -heatre, +n&., having been in&orporated on '&tober !#, !"#$, it &ould
not have &ontra&ted any obligation prior to said date. +t was, therefore, prayed that the &omplaint be dismissedA that said
defendant be awarded the sum , 3,555 for damages, and su&h other relief as may be 8ust and proper in the premises.
-he surety &ompany, in the meantime, upon dis&overy that the land was already registered under the -orrens System and
that there was a noti&e of lis pendens thereon, :led on .ugust !0, !"#4, or within the !-year period after the issuan&e of the
&erti:&ate of title, a petition for review of the de&ree of the land registration &ourt dated '&tober !4, !"#0, whi&h was made
the basis of 'C- <o. '-6!", in order to annotate the rights and interests of the surety &ompany over said properties ?Land
9egistration Case <o. !0 DL9' 9e&. <o. 2"$@. 'pposition thereto was oBered by Enrique Lopez, asserting that the amount
demanded by him &onstituted a preferred lien over the properties of the obligorsA that the surety &ompany was guilty of
negligen&e when it failed to present an opposition to the appli&ation for registration of the propertyA and that if any violation
of the rights and interest of said surety would ever be made, same must be sub8e&t to the lien in his favor.
-he two &ases were heard 8ointly and in a de&ision dated '&tober 65, !"32, the lower Court, after ma*ing an e/haustive and
detailed analysis of the respe&tive stands of the parties and the eviden&e addu&ed at the trial, held that defendants %i&ente
'rosa, (r., and the ,laza -heatre, +n&., were jointly liable for the unpaid balan&e of the &ost of lumber used in the &onstru&tion
of the &uildin$ and the plaintiB thus a&quired the materialman)s lien over the same. +n ma*ing the pronoun&ement that the
lien was merely &on:ned to the building and did not e/tend to the land on whi&h the &onstru&tion was made, the trial 8udge
too* into &onsideration the fa&t that when plaintiB started the delivery of lumber in ay, !"#$, the land was not yet owned by
the &orporationA that the mortgage in favor of Luzon Surety Company was previously registered under .&t <o. 66##A that the
&odal provision ?.rt. !"26 of the old Spanish Civil Code@ spe&ifying that refe&tion &redits are preferred &ould refer only to
buildings whi&h are also &lassi:ed as real properties, upon whi&h said refe&tion was made. +t was, however, de&lared that
plaintiB)s lien on the building was superior to the right of the surety &ompany. .nd :nding that the ,laza -heatre, +n&., had no
ob8e&tion to the review of the de&ree issued in its favor by the land registration &ourt and the in&lusion in the title of the
en&umbran&e in favor of the surety &ompany, the &ourt a 'uo granted the petition :led by the latter &ompany. 1efendants
'rosa and the ,laza -heatre, +n&., were thus required to pay jointly the amount of ,#!,00!.63 with legal interest and &osts
within "5 days from noti&e of said de&isionA that in &ase of default, the #25 shares of sto&* assigned by 'rosa to plaintiB be
sold at publi& au&tion and the pro&eeds thereof be applied to the payment of the amount due the plaintiB, plus interest and
&ostsA and that the en&umbran&e in favor of the surety &ompany be endorsed at the ba&* of 'C- <o. '-6"!, with notation +
that with respe&t to the building, said mortgage was sub8e&t to the materialman)s lien in favor of Enrique Lopez.
,laintiB tried to se&ure a modi:&ation of the de&ision in so far as it de&lared that the obligation of therein defendants was 8oint
instead of solidary, and that the lien did not e/tend to the land, but same was denied by order the &ourt of 1e&ember 26,
!"32. -he matter was thus appealed to the Court of appeals, whi&h aCrmed the lower &ourt)s ruling, and then to this -ribunal.
+n this instan&e, plaintiB-appellant raises 2 issuesE ?!@ whether a materialman)s lien for the value of the materials used in the
&onstru&tion of a building atta&hes to said stru&ture alone and does not e/tend to the land on whi&h the building is adhered
toA and ?2@ whether the lower &ourt and the Court of .ppeals erred in not providing that the material mans liens is superior to
the mortgage e/e&uted in favor surety &ompany not only on the building but also on the land.
+t is to be noted in this appeal that Enrique Lopez has not raised any question against the part of the de&ision senten&ing
defendants 'rosa and ,laza -heatre, +n&., to pay jointly the sum of ,#!,00!.63, so 7e will not ta*e up or &onsider anything on
that point. .ppellant, however, &ontends that the lien &reated in favor of the furnisher of the materials used for the
&onstru&tion, repair or refe&tion of a building, is also e/tended to the land whi&h the &onstru&tion was made, and in support
thereof he relies on .rti&le !"26 of the Spanish Civil Code, pertinent law on the matter, whi&h reads as followsE
.9-. !"26. 7ith respe&t to determinate real property and real rights of the debtor, the following are preferredE
/ / / / / / / / /
3. Credits for refe&tion, not entered or re&orded, (it% respect to t%e estate upon (%ic% t%e refection (as made, and
only with respe&t to other &redits diBerent from those mentioned in four pre&eding paragraphs.
+t is argued that in view of the employment of the phrase real estate, or immovable property, and inasmu&h as said provision
does not &ontain any spe&i:&ation delimiting the lien to the building, said arti&le must be &onstrued as to embra&e both the
land and the building or stru&ture adhering thereto. 7e &annot subs&ribe to this view, for while it is true that generally, real
estate &onnotes the land and the building &onstru&ted thereon, it is obvious that the in&lusion of the building, separate and
distin&t from the land, in the enumeration of what may &onstitute real properties
!
&ould mean only one thing F that a building
is by itself an immovable property, a do&trine already pronoun&ed by this Court in the &ase of Leun$ )ee *s. Stron$ #ac%inery
Co., 60 ,hil., $##. oreover, and in view of the absen&e of any spe&i:& provision of law to the &ontrary, a building is an
immovable property, irrespe&tive of whether or not said stru&ture and the land on whi&h it is adhered to belong to the same
owner.
. &lose e/amination of the provision of the Civil Code invo*ed by appellant reveals that the law gives preferen&e to
unregistered refe&tionary &redits only with respe&t to the real estate upon whi&h the refe&tion or wor* was made. -his being
so, the inevitable &on&lusion must be that the lien so &reated atta&hes merely to the immovable property for the &onstru&tion
or repair of whi&h the obligation was in&urred. Evidently, therefore, the lien in favor of appellant for the unpaid value of the
lumber used in the &onstru&tion of the building atta&hes only to said stru&ture and to no other property of the obligors.
Considering the &on&lusion thus arrived at, i.e., that the materialman)s lien &ould be &harged only to the building for whi&h the
&redit was made or whi&h re&eived the bene:t of refe&tion, the lower &ourt was right in, holding at the interest of the
mortgagee over the land is superior and &annot be made sub8e&t to the said materialman)s lien.
7herefore, and on the strength of the foregoing &onsiderations, the de&ision appealed from is hereby aCrmed, with &osts
against appellant. +t is so ordered.
Paras C.". Ben$zon Padilla #ontemayor Reyes +. Bautista +n$elo La&rador Concepcion Reyes ".B.L. and ,ndencia
"". &on&ur
D.9. <o. L-0530 '&tober 2", !"3#
.CG+<E9H I E<D+<EE9+<D S;,,L+ES, +<C., petitioner,
vs.
"(E (ONOR$+LE !OUR" OF $PPE$L#, (ON. PO"EN!I$NO PE!#ON, %U,GE OF "(E !OUR" OF FIR#" IN#"$N!E OF
-$NIL$, IPO LI-E#"ONE !O., IN!., a&' $N"ONIO ILL$R$-$, respondents.
-icente ". .rancisco for petitioner.
Capistrano and Capistrano for respondents.
!ON!EP!ION, J.*
-his is an appeal by certiorari, ta*en by petitioner a&hinery and Engineering Supplies +n&., from a de&ision of the Court of
.ppeals denying an original petition for certiorari :led by said petitioner against Gon. ,oten&iano ,e&son, +po Limestone Co.,
+n&., and .ntonio %illarama, the respondents herein.
-he pertinent fa&ts are set forth in the de&ision of the Court of .ppeals, from whi&h we quoteE
'n ar&h !6, !"36, the herein petitioner :led a &omplaint for replevin in the Court of >irst +nstan&e of anila, Civil
Case <o. !"5$0, entitled =a&hinery and Engineering Supplies, +n&., ,laintiB, vs. +po Limestone Co., +n&., and 1r.
.ntonio %illarama, defendants=, for the re&overy of the ma&hinery and equipment sold and delivered to said
defendants at their fa&tory in barrio Bigti, <orzagaray, Bula&an. ;pon appli&ation e/-parte of the petitioner &ompany,
and upon approval of petitioner)s bond in the sum of ,!3,0$".55, on ar&h !6,!"36, respondent 8udge issued an
order, &ommanding the ,rovin&ial SheriB of Bula&an to seize and ta*e immediate possession of the properties
spe&i:ed in the order ?.ppendi/ +, .nswer@. 'n ar&h !", !"36, two deputy sheriBs of Bula&an, the said 9amon S.
9o&o, and a &rew of te&hni&al men and laborers pro&eeded to Bigti, for the purpose of &arrying the &ourt)s order into
eBe&t. Leonardo Contreras, anager of the respondent Company, and ,edro -orres, in &harge thereof, met the deputy
sheriBs, and Contreras handed to them a letter addressed to .tty. Leopoldo C. ,alad, e/-o:&io ,rovin&ial SheriB of
Bula&an, signed by .tty. .dolfo Dar&ia of the defendants therein, protesting against the seizure of the properties in
question, on the ground that they are not personal properties. Contending that the SheriB)s duty is merely
ministerial, the deputy sheriBs, 9o&o, the latter)s &rew of te&hni&ians and laborers, Contreras and -orres, went to the
fa&tory. 9o&o)s attention was &alled to the fa&t that the equipment &ould not possibly be dismantled without &ausing
damages or in8uries to the wooden frames atta&hed to them. .s 9o&o insisted in dismantling the equipment on his
own responsibility, alleging that the bond was posted for su&h eventuality, the deputy sheriBs dire&ted that some of
the supports thereof be &ut ?.ppendi/ 2@. 'n ar&h 25, !"36, the defendant Company :led an urgent motion, with a
&ounter-bond in the amount of ,!3,0$", for the return of the properties seized by the deputy sheriBs. 'n the same
day, the trial &ourt issued an order, dire&ting the ,rovin&ial SheriB of Bula&an to return the ma&hinery and equipment
to the pla&e where they were installed at the time of the seizure ?.ppendi/ 6@. 'n ar&h 2!, !"36, the deputy sheriBs
returned the properties seized, by depositing them along the road, near the quarry, of the defendant Company, at
Bigti, without the bene:t of inventory and without re-installing hem in their former position and repla&ing the
destroyed posts, whi&h rendered their use impra&ti&able. 'n ar&h 26, !"36, the defendants) &ounsel as*ed the
provin&ial SheriB if the ma&hinery and equipment, dumped on the road would be re-installed tom their former
position and &ondition ?letter, .ppendi/ #@. 'n ar&h 2#, !"36, the ,rovin&ial SheriB :led an urgent motion in &ourt,
manifesting that 9o&o had been as*ed to furnish the SheriB)s oC&e with the e/penses, laborers, te&hni&al men and
equipment, to &arry into eBe&t the &ourt)s order, to return the seized properties in the same way said 9o&o found
them on the day of seizure, but said 9o&o absolutely refused to do so, and as*ing the &ourt that the ,laintiB therein
be ordered to provide the required aid or relieve the said SheriB of the duty of &omplying with the said order dated
ar&h 25, !"36 ?.ppendi/ 3@. 'n ar&h 65, !"36, the trial &ourt ordered the ,rovin&ial SheriB and the ,laintiB to
reinstate the ma&hinery and equipment removed by them in their original &ondition in whi&h they were found before
their removal at the e/pense of the ,laintiB ?.ppendi/ 0@. .n urgent motion of the ,rovin&ial SheriB dated .pril !3,
!"36, praying for an e/tension of 25 days within whi&h to &omply with the order of the Court ?appendi/ !5@ was
deniedA and on ay #, !"36, the trial &ourt ordered the ,laintiB therein to furnish the ,rovin&ial SheriB within 3 days
with the ne&essary funds, te&hni&al men, laborers, equipment and materials to eBe&t the repeatedly mentioned re-
installation ?.ppendi/ !6@. ?,etitioner)s brief, .ppendi/ ., pp. +-+%.@
-hereupon petitioner instituted in the Court of .ppeals &ivil &ase D.9. <o. !!2#4-9, entitled =a&hinery and Engineering
Supplies, +n&. vs. Gonorable ,oten&iano ,e&son, ,rovin&ial SheriB of Bula&an, +po Limestone Co., +n&., and .ntonio %illarama.=
+n the petition therein :led, it was alleged that, in ordering the petitioner to furnish the provin&ial sheriB of Bula&an =with
ne&essary funds, te&hni&al men, laborers, equipment and materials, to eBe&t the installation of the ma&hinery and
equipment= in question, the Court of >irs +nstan&e of Bula&an had &ommitted a grave abuse if dis&retion and a&ted in e/&ess
of its 8urisdi&tion, for whi&h reason it was prayed that its order to this eBe&t be nulli:ed, and that, meanwhile, a writ of
preliminary in8un&tion be issued to restrain the enfor&ement o said order of may #, !"36. .lthough the aforementioned writ
was issued by the Court of .ppeals, the same subsequently dismissed by the &ase for la&* of merit, with &osts against the
petitioner, upon the following groundsE
7hile the seizure of the equipment and personal properties was ordered by the respondent Court, it is, however,
logi&al to presume that said &ourt did not authorize the petitioner or its agents to destroy, as they did, said
ma&hinery and equipment, by dismantling and unbolting the same from their &on&rete basements, and &utting and
sawing their wooden supports, thereby rendering them unservi&eable and beyond repair, unless those parts
removed, &ut and sawed be repla&ed, whi&h the petitioner, not withstanding the respondent Court)s order, adamantly
refused to do. -he ,rovin&ial SheriB) s tortious a&t, in obedien&e to the insistent proddings of the president of the
,etitioner, 9amon S. 9o&o, had no 8usti:&ation in law, notwithstanding the SheriBs) &laim that his duty was
ministerial. +t was the bounden duty of the respondent (udge to give redress to the respondent Company, for the
unlawful and wrongful a&ts &ommitted by the petitioner and its agents. .nd as this was the true ob8e&t of the order of
ar&h 65, !"36, we &annot hold that same was within its 8urisdi&tion to issue. -he ministerial duty of the SheriB
should have its limitations. -he SheriB *new or must have *nown what is inherently right and inherently wrong, more
so when, as in this parti&ular &ase, the deputy sheriBs were shown a letter of respondent Company)s attorney, that
the ma&hinery were not personal properties and, therefore, not sub8e&t to seizure by the terms of the order. 7hile it
may be &on&eded that this was a question of law too te&hni&al to de&ide on the spot, it would not have &osts the
SheriB mu&h time and diC&ulty to bring the letter to the &ourt)s attention and have the equipment and ma&hinery
guarded, so as not to frustrate the order of seizure issued by the trial &ourt. But a&ting upon the dire&tives of the
president of the ,etitioner, to seize the properties at any &osts, in issuing the order sought to be annulled, had not
&ommitted abuse of dis&retion at all or a&ted in an arbitrary or despoti& manner, by reason of passion or personal
hostilityA on the &ontrary, it issued said order, guided by the well *nown prin&iple that of the property has to be
returned, it should be returned in as good a &ondition as when ta*en ?Ba&hra&h otor Co., +n&., *s. Bona, ## ,hil.,
604@. +f any one had gone beyond the s&ope of his authority, it is the respondent ,rovin&ial SheriB. But &onsidering
that fa&t that he a&ted under the pressure of 9amon S. 9o&o, and that the order impugned was issued not by him, but
by the respondent (udge, 7e simply de&lare that said SheriB) a&t was most unusual and the result of a poor
8udgment. oreover, the SheriB not being an oC&er e/er&ising 8udi&ial fun&tions, the writ may not rea&h him,
forcertiorari lies only to review 8udi&ial a&tions.
-he ,etitioner &omplains that the respondent (udge had &ompletely disregarded his manifestation that the ma&hinery
and equipment seized were and still are the ,etitioner)s property until fully paid for and su&h never be&ame
immovable. -he question of ownership and the appli&ability of .rt. #!3 of the new Civil Code are immaterial in the
determination of the only issue involved in this &ase. +t is a matter of eviden&e whi&h should be de&ided in the
hearing of the &ase on the merits. -he question as to whether the ma&hinery or equipment in litigation are
immovable or not is li*ewise immaterial, be&ause the only issue raised before the trial &ourt was whether the
,rovin&ial SheriB of Bula&an, at the ,etitioner)s instan&e, was 8usti:ed in destroying the ma&hinery and in refusing to
restore them to their original form , at the e/pense of the ,etitioner. 7hatever might be the legal &hara&ter of the
ma&hinery and equipment, would not be in any way 8ustify their 8ustify their destru&tion by the SheriB)s and the said
,etitioner)s. ?,etitioner)s brief, .ppendi/ ., pp. +%-%++.@
. motion for re&onsideration of this de&ision of the Court of .ppeals having been denied , petitioner has brought the &ase to
;s for review by writ of certiorari. ;pon e/amination of the re&ord, 7e are satis:ed, however that the Court of .ppeals was
8usti:ed in dismissing the &ase.
-he spe&ial &ivil a&tion *nown as replevin, governed by 9ule $2 of Court, is appli&able only to =personal property=.
'rdinarily replevin may be brought to re&over any spe&i:& personal property unlawfully ta*en or detained from the
owner thereof, provided su&h property is &apable of identi:&ation and deliveryA &ut reple*in (ill not lie for t%e
reco*ery of real property or in&orporeal personal property. ?00 C. (. S. !0@ ?Emphasis supplied.@
7hen the sheriB repaired to the premises of respondent, +po Limestone Co., +n&., ma&hinery and equipment in question
appeared to be atta&hed to the land, parti&ularly to the &on&rete foundation of said premises, in a :/ed manner, in su&h a
way that the former &ould not be separated from the latter =without brea*ing the material or deterioration of the ob8e&t.=
Gen&e, in order to remove said out:t, it be&ame ne&essary, not only to unbolt the same, but , also, to &ut some of its wooden
supports. oreover, said ma&hinery and equipment were =intended by the owner of the tenement for an industry= &arried on
said immovable and tended.= >or these reasons, they were already immovable property pursuant to paragraphs 6 and 3 of
.rti&le #!3 of Civil Code of the ,hilippines, whi&h are substantially identi&al to paragraphs 6 and 3 of .rti&le 66# of the Civil
Code of Spain. .s su&h immovable property, they were not sub8e&t to replevin.
+n so far as an arti&le, in&luding a :/ture anne/ed by a tenant, is regarded as part of the realty, it is not the sub8e&t
for personalityA . . . .
. . . the a&tion of replevin does not lie for arti&les so anne/ed to the realty as to be part as to be part thereof, as, for
e/ample, a house or a turbine pump &onstituting part of a building)s &ooling systemA . . . ?6$ C. (. S. !555 I !55!@
oreover, as the provin&ial sheriB hesitated to remove the property in question, petitioner)s agent and president, r. 9amon
9o&o, insisted =on the dismantling at %is o(n responsi&ility,= stating that., pre&isely, =that is the reason why plaintiB posted a
bond .= +n this manner, petitioner &learly assumed the &orresponding ris*s.
Su&h assumption of ris* be&omes more apparent when we &onsider that, pursuant to Se&tion 3 of 9ule $2 of the 9ules of
Court, the defendant in an a&tion for replevin is entitled to the return of the property in dispute upon the :ling of a
&ounterbond, as provided therein. +n other words, petitioner *new that the restitution of said property to respondent &ompany
might be ordered under said provision of the 9ules of Court, and that, &onsequently, it may be&ome ne&essary for petitioner
to meet the liabilities in&ident to su&h return.
Lastly, although the parties have not &ited, and 7e have not found, any authority squarely in point F obviously real property
are not sub8e&t to replevin F it is well settled that, when the restitution of what has been ordered, the goods in question shall
be returned in substantially the same &ondition as when ta*en ?3# C.(., 3"5-$55, $#5-$#!@. +nasmu&h as the ma&hinery and
equipment involved in this &ase were duly installed and aC/ed in the premises of respondent &ompany when petitioner)s
representative &aused said property to be dismantled and then removed, it follows that petitioner must also do everything
ne&essary to the reinstallation of said property in &onformity with its original &ondition.
7herefore, the de&ision of the Court of .ppeals is hereby aCrmed, with &osts against the petitioner. So ordered.
G.R. No. 10.0/1 %a&uary 29, 1990
+ENGUE" !ORPOR$"ION, petitioner,
vs.
!EN"R$L +O$R, OF $##E##-EN" $PPE$L#, +O$R, OF $##E##-EN" $PPE$L# OF Z$-+$LE#, PROIN!I$L
$##E##OR OF Z$-+$LE#, PROIN!E OF Z$-+$LE#, a&' -UNI!IP$LI"1 OF #$N -$R!ELINO, respondents.
Romulo #a&anta Buena*entura Sayoc & De los +n$eles for petitioner.

!RUZ, J.:
-he realty ta/ assessment involved in this &ase amounts to ,!!,6!",65#.55. +t has been imposed on the petitioner)s tailings
dam and the land thereunder over its protest.
-he &ontroversy arose in !"43 when the ,rovin&ial .ssessor of Jambales assessed the said properties as ta/able
improvements. -he assessment was appealed to the Board of .ssessment .ppeals of the ,rovin&e of Jambales. 'n .ugust
2#, !"44, the appeal was dismissed mainly on the ground of the petitioner)s =failure to pay the realty ta/es that fell due
during the penden&y of the appeal.=
-he petitioner seasonably elevated the matter to the Central Board of .ssessment .ppeals,
1
one of the herein respondents.
+n its de&ision dated ar&h 22, !""5, the Board reversed the dismissal of the appeal but, on the merits, agreed that =the
tailings dam and the lands submerged thereunder ?were@ sub8e&t to realty ta/.=
>or purposes of ta/ation the dam is &onsidered as real property as it &omes within the ob8e&t mentioned in
paragraphs ?a@ and ?b@ of .rti&le #!3 of the <ew Civil Code. +t is a &onstru&tion adhered to the soil whi&h
&annot be separated or deta&hed without brea*ing the material or &ausing destru&tion on the land upon
whi&h it is atta&hed. -he immovable nature of the dam as an improvement determines its &hara&ter as real
property, hen&e ta/able under Se&tion 64 of the 9eal ,roperty -a/ Code. ?,.1. #$#@.
.lthough the dam is partly used as an anti-pollution devi&e, this Board &annot a&&ede to the request for ta/
e/emption in the absen&e of a law authorizing the same.
/// /// ///
7e :nd the appraisal on the land submerged as a result of the &onstru&tion of the tailings dam, &overed by
-a/ 1e&laration <os.
552-52$5 and 552-52$$, to be in a&&ordan&e with the S&hedule of ar*et %alues for Jambales whi&h was
reviewed and allowed for use by the inistry ?1epartment@ of >inan&e in the !"4!-!"42 general revision. <o
serious attempt was made by ,etitioner-.ppellant Benguet Corporation to impugn its reasonableness, i.e.,
that the ,35.55 per square meter applied by 9espondent-.ppellee ,rovin&ial .ssessor is indeed e/&essive
and un&ons&ionable. Gen&e, we :nd no &ause to disturb the mar*et value applied by 9espondent .ppellee
,rovin&ial .ssessor of Jambales on the properties of ,etitioner-.ppellant Benguet Corporation &overed by -a/
1e&laration <os. 552-52$5 and 552-52$$.
-his petition for certiorari now see*s to reverse the above ruling.
-he prin&ipal &ontention of the petitioner is that the tailings dam is not sub8e&t to realty ta/ be&ause it is not an
=improvement= upon the land within the meaning of the 9eal ,roperty -a/ Code. ore parti&ularly, it is &laimed F
?!@ as regards the tailings dam as an =improvement=E
?a@ that the tailings dam has no value separate from and independent of the mineA hen&e,
by itself it &annot be &onsidered an improvement separately assessableA
?b@ that it is an integral part of the mineA
?&@ that at the end of the mining operation of the petitioner &orporation in the area, the
tailings dam will bene:t the lo&al &ommunity by serving as an irrigation fa&ilityA
?d@ that the building of the dam has stripped the property of any &ommer&ial value as the
property is submerged under water wastes from the mineA
?e@ that the tailings dam is an environmental pollution &ontrol devi&e for whi&h petitioner
must be &ommended rather than penalized with a realty ta/ assessmentA
?f@ that the installation and utilization of the tailings dam as a pollution &ontrol devi&e is a
requirement imposed by lawA
?2@ as regards the valuation of the tailings dam and the submerged landsE
?a@ that the sub8e&t properties have no mar*et value as they &annot be sold independently
of the mineA
?b@ that the valuation of the tailings dam should be based on its in&idental use by petitioner
as a water reservoir and not on the alleged &ost of &onstru&tion of the dam and the annual
build-up e/penseA
?&@ that the =residual value formula= used by the ,rovin&ial .ssessor and adopted by
respondent CB.. is arbitrary and erroneousA and
?6@ as regards the petitioner)s liability for penalties for
non-de&laration of the tailings dam and the submerged lands for realty ta/ purposesE
?a@ that where a ta/ is not paid in an honest belief that it is not due, no penalty shall be
&olle&ted in addition to the basi& ta/A
?b@ that no other mining &ompanies in the ,hilippines operating a tailings dam have been
made to de&lare the dam for realty ta/ purposes.
-he petitioner does not dispute that the tailings dam may be &onsidered realty within the meaning of .rti&le #!3. +t insists,
however, that the dam &annot be sub8e&ted to realty ta/ as a separate and independent property be&ause it does not
&onstitute an =assessable improvement= on the mine although a &onsiderable sum may have been spent in &onstru&ting and
maintaining it.
-o support its theory, the petitioner &ites the following &asesE
!. #unicipality of Cota&ato *. Santos /012 P%il. 3456, where this Court &onsidered the di*es and gates &onstru&ted by the
ta/payer in &onne&tion with a :shpond operation as integral parts of the :shpond.
2. Bisli$ Bay Lum&er Co. *. Pro*incial Go*ernment of Suri$ao /011 P%il. 5156, involving a road &onstru&ted by the timber
&on&essionaire in the area, where this Court did not impose a realty ta/ on the road primarily for two reasonsE
+n the :rst pla&e, it &annot be disputed that the ownership of the road that was &onstru&ted by appellee
belongs to the government by right of a&&ession not only be&ause it is inherently in&orporated or atta&hed to
the timber land . . . but also be&ause upon the e/piration of the &on&ession said road would ultimately pass
to the national government. . . . +n the se&ond pla&e, while the road was &onstru&ted by appellee primarily for
its use and bene:t, the privilege is not e/&lusive, for . . . appellee &annot prevent the use of portions of the
&on&ession for homesteading purposes. +t is also duty bound to allow the free use of forest produ&ts within
the &on&ession for the personal use of individuals residing in or within the vi&inity of the land. . . . +n other
words, the government has pra&ti&ally reserved the rights to use the road to promote its varied a&tivities.
Sin&e, as above shown, the road in question &annot be &onsidered as an improvement whi&h belongs to
appellee, although in part is for its bene:t, it is &lear that the same &annot be the sub8e&t of assessment
within the meaning of Se&tion 2 of C...
<o. #05.
.pparently, the realty ta/ was not imposed not be&ause the road was an integral part of the lumber &on&ession but be&ause
the government had the right to use the road to promote its varied a&tivities.
6. 7endric8 *. T(in La8es Reser*oir Co. /099 Paci:c ;;96, an .meri&an &ase, where it was de&lared that the reservoir dam
went with and formed part of the reservoir and that the dam would be =worthless and useless e/&ept in &onne&tion with the
outlet &anal, and the water rights in the reservoir represent and in&lude whatever utility or value there is in the dam and
headgates.=
#. <ntario Sil*er #inin$ Co. *. =i>on /049 Paci:c 93;6, also from the ;nited States. -his &ase involved drain tunnels
&onstru&ted by plaintiB when it e/panded its mining operations downward, resulting in a &onstantly in&reasing Kow of water in
the said mine. +t was held thatE
7hatever value they have is &onne&ted with and in fa&t is an integral part of the mine itself. (ust as mu&h so
as any shaft whi&h des&ends into the earth or an underground in&line, tunnel, or drift would be whi&h was
used in &onne&tion with the mine.
'n the other hand, the Soli&itor Deneral argues that the dam is an assessable improvement be&ause it enhan&es the value
and utility of the mine. -he primary fun&tion of the dam is to re&eive, retain and hold the water &oming from the operations of
the mine, and it also enables the petitioner to impound water, whi&h is then re&y&led for use in the plant.
-here is also ample 8urispruden&e to support this view, thusE
. . . -he said equipment and ma&hinery, as appurtenan&es to the gas station building or shed owned by
Calte/ ?as to whi&h it is sub8e&t to realty ta/@ and whi&h :/tures are ne&essary to the operation of the gas
station, for without them the gas station would be useless and whi&h have been atta&hed or aC/ed
permanently to the gas station site or embedded therein, are ta/able improvements and ma&hinery within
the meaning of the .ssessment Law and the 9eal ,roperty -a/ Code. ?Calte/ L,hil.M +n&. v. CB.., !!# SC9.
2"$@.
7e hold that while the two storage tan*s are not embedded in the land, they may, nevertheless, be
&onsidered as improvements on the land, enhan&ing its utility and rendering it useful to the oil industry. +t is
undeniable that the two tan*s have been installed with some degree of permanen&e as re&epta&les for the
&onsiderable quantities of oil needed by E9.LC' for its operations. ?anila Ele&tri& Co. v. CB.., !!# SC9.
206@.
-he pipeline system in question is indubitably a &onstru&tion adhering to the soil. +t is atta&hed to the land in
su&h a way that it &annot be separated therefrom without dismantling the steel pipes whi&h were welded to
form the pipeline. ?E9.LC' Se&urities +ndustrial Corp. v. CB.., !!# SC9. 2$!@.
-he ta/ upon the dam was properly assessed to the plaintiB as a ta/ upon real estate. ?>la/-,ond 7ater Co.
v. City of Lynn, !$ <.E. 0#2@.
-he oil tan*s are stru&tures within the statute, that they are designed and used by the owner as permanent
improvement of the free hold, and that for su&h reasons they were properly assessed by the respondent
ta/ing distri&t as improvements. ?Standard 'il Co. of <ew (ersey v. .tlanti& City, !3 . 2d. 20!@
-he 9eal ,roperty -a/ Code does not &arry a de:nition of =real property= and simply says that the realty ta/ is imposed on
=real property, su&h as lands, buildings, ma&hinery and other improvements aC/ed or atta&hed to real property.= +n the
absen&e of su&h a de:nition, we apply .rti&le #!3 of the Civil Code, the pertinent portions of whi&h stateE
.rt. #!3. -he following are immovable property.
?!@ Lands, buildings and &onstru&tions of all *inds adhered to the soilA
/// /// ///
?6@ Everything atta&hed to an immovable in a :/ed manner, in su&h a way that it &annot be separated
therefrom without brea*ing the material or deterioration of the ob8e&t.
Se&tion 2 of C... <o. #05, otherwise *nown as the .ssessment Law, provides that the realty ta/ is due =on the real property,
in&luding land, buildings, ma&hinery and other improvements= not spe&i:&ally e/empted in Se&tion 6 thereof. . reading of
that se&tion shows that the tailings dam of the petitioner does not fall under any of the &lasses of e/empt real properties
therein enumerated.
+s the tailings dam an improvement on the mineN Se&tion 6?*@ of the 9eal ,roperty -a/ Code de:nes improvement as followsE
?*@ +mprovements F is a valuable addition made to property or an amelioration in its &ondition, amounting to
more than mere repairs or repla&ement of waste, &osting labor or &apital and intended to enhan&e its value,
beauty or utility or to adopt it for new or further purposes.
-he term has also been interpreted as =arti:&ial alterations of the physi&al &ondition of the ground that arereasona&ly
permanent in c%aracter.=
2
-he Court notes that in the 'ntario &ase the plaintiB admitted that the mine involved therein &ould not be operated without
the aid of the drain tunnels, whi&h were indispensable to the su&&essful development and e/tra&tion of the minerals therein.
-his is not true in the present &ase.
Even without the tailings dam, the petitioner)s mining operation &an still be &arried out be&ause the primary fun&tion of the
dam is merely to re&eive and retain the wastes and water &oming from the mine. -here is no allegation that the water &oming
from the dam is the sole sour&e of water for the mining operation so as to ma*e the dam an integral part of the mine. +n fa&t,
as a result of the &onstru&tion of the dam, the petitioner &an now impound and re&y&le water without having to spend for the
building of a water reservoir. .nd as the petitioner itself points out, even if the petitioner)s mine is shut down or &eases
operation, the dam may still be used for irrigation of the surrounding areas, again unli*e in the 'ntario &ase.
.s &orre&tly observed by the CB.., the Oendri&* &ase is also not appli&able be&ause it involved water reservoir dams used for
diBerent purposes and for the bene:t of the surrounding areas. By &ontrast, the tailings dam in question is being
used e>clusi*ely for the bene:t of the petitioner.
Curiously, the petitioner, while vigorously arguing that the tailings dam has no separate e/isten&e, 8ust as vigorously &ontends
that at the end of the mining operation the tailings dam will serve the lo&al &ommunity as an irrigation fa&ility, thereby
implying that it &an e/ist independently of the mine.
>rom the de:nitions and the &ases &ited above, it would appear that whether a stru&ture &onstitutes an improvement so as to
parta*e of the status of realty would depend upon the degree of permanence intended in its construction and use. -he
e/pression =permanent= as applied to an improvement does not imply that the improvement must be used perpetually but
only until the purpose to whi&h the prin&ipal realty is devoted has been a&&omplished. +t is suC&ient that the improvement is
intended to remain as long as the land to whi&h it is anne/ed is still used for the said purpose.
-he Court is &onvin&ed that the sub8e&t dam falls within the de:nition of an =improvement= be&ause it is permanent in
&hara&ter and it enhan&es both the value and utility of petitioner)s mine. oreover, the immovable nature of the dam de:nes
its &hara&ter as real property under .rti&le #!3 of the Civil Code and thus ma*es it ta/able under Se&tion 64 of the 9eal
,roperty -a/ Code.
-he Court will also re8e&t the &ontention that the appraisal at ,35.55 per square meter made by the ,rovin&ial .ssessor is
e/&essive and that his use of the =residual value formula= is arbitrary and erroneous.
9espondent ,rovin&ial .ssessor e/plained the use of the =residual value formula= as followsE
. 35P residual value is applied in the &omputation be&ause, while it is true that when slime :lls the di*e, it
will then be &overed by another di*e or stage, the stage &overed is still there and still e/ists and sin&e only
one fa&e of the di*e is :lled, 35P or the other fa&e is unutilized.
+n sustaining this formula, the CB.. gave the following 8usti:&ationE
7e :nd the appraisal on the land submerged as a result of the &onstru&tion of the tailings dam, &overed by
-a/ 1e&laration <os.
552-52$5 and 552-52$$, to be in a&&ordan&e with the S&hedule of ar*et %alues for San ar&elino,
Jambales, whi&h is :fty ?35.55@ pesos per square meter for third &lass industrial land ?-S<, page !0, (uly 3,
!"4"@ and S&hedule of ar*et %alues for Jambales whi&h was reviewed and allowed for use by the inistry
?1epartment@ of >inan&e in the !"4!-!"42 general revision. <o serious attempt was made by ,etitioner-
.ppellant Benguet Corporation to impugn its reasonableness, i.e, that the ,35.55 per square meter applied
by 9espondent-.ppellee ,rovin&ial .ssessor is indeed e/&essive and un&ons&ionable. Gen&e, we :nd no
&ause to disturb the mar*et value applied by 9espondent-.ppellee ,rovin&ial .ssessor of Jambales on the
properties of ,etitioner-.ppellant Benguet Corporation &overed by -a/ 1e&laration <os. 552-52$5 and 552-
52$$.
+t has been the long-standing poli&y of this Court to respe&t the &on&lusions of quasi-8udi&ial agen&ies li*e the CB.., whi&h,
be&ause of the nature of its fun&tions and its frequent e/er&ise thereof, has developed e/pertise in the resolution of
assessment problems. -he only e/&eption to this rule is where it is &learly shown that the administrative body has &ommitted
grave abuse of dis&retion &alling for the intervention of this Court in the e/er&ise of its own powers of review. -here is no su&h
showing in the &ase at bar.
7e disagree, however, with the ruling of respondent CB.. that it &annot ta*e &ognizan&e of the issue of the propriety of the
penalties imposed upon it, whi&h was raised by the petitioner for the :rst time only on appeal. -he CB.. held that this =is an
entirely new matter that petitioner &an ta*e up with the ,rovin&ial .ssessor ?and@ &an be the sub8e&t of another protest before
the Lo&al Board or a negotiation with the lo&al san$$unian . . ., and in &ase of an adverse de&ision by either the Lo&al Board or
the lo&al san$$unian, ?it &an@ elevate the same to this Board for appropriate a&tion.=
-here is no need for this time-wasting pro&edure. -he Court may resolve the issue in this petition instead of referring it ba&*
to the lo&al authorities. 7e have studied the fa&ts and &ir&umstan&es of this &ase as above dis&ussed and :nd that the
petitioner has a&ted in good faith in questioning the assessment on the tailings dam and the land submerged thereunder. +t is
&lear that it has not done so for the purpose of evading or delaying the payment of the questioned ta/. Gen&e, we hold that
the petitioner is not sub8e&t to penalty for its
non-de&laration of the tailings dam and the submerged lands for realty ta/ purposes.
7GE9E>'9E, the petition is 1+S+SSE1 for failure to show that the questioned de&ision of respondent Central Board of
.ssessment .ppeals is tainted with grave abuse of dis&retion e/&ept as to the imposition of penalties upon the petitioner
whi&h is hereby SE- .S+1E. Costs against the petitioner. +t is so ordered.
Nar*asa C.". Gutierrez "r. Padilla Bidin Gri?o@+'uino Re$alado Da*ide "r. Romero Nocon Bellosillo #elo and Campos "r.
"". concur.
.eliciano ". too8 no part.
G.R. No. L-11.58 February 15, 1918
LEUNG 1EE, plaintiB-appellant,
vs.
FR$N2 L. #"RONG -$!(INER1 !O-P$N1 a&' %. G. 3ILLI$-#ON, defendants-appellees.
!$R#ON, J.*
-he =CompaQia .gri&ola >ilipina= bought a &onsiderable quantity of ri&e-&leaning ma&hinery &ompany from the defendant
ma&hinery &ompany, and e/e&uted a &hattel mortgage thereon to se&ure payment of the pur&hase pri&e. +t in&luded in the
mortgage deed the building of strong materials in whi&h the ma&hinery was installed, without any referen&e to the land on
whi&h it stood. -he indebtedness se&ured by this instrument not having been paid when it fell due, the mortgaged property
was sold by the sheriB, in pursuan&e of the terms of the mortgage instrument, and was bought in by the ma&hinery &ompany.
-he mortgage was registered in the &hattel mortgage registry, and the sale of the property to the ma&hinery &ompany in
satisfa&tion of the mortgage was annotated in the same registry on 1e&ember 2", !"!6.
. few wee*s thereafter, on or about the !#th of (anuary, !"!#, the =CompaQia .gri&ola >ilipina= e/e&uted a deed of sale of the
land upon whi&h the building stood to the ma&hinery &ompany, but this deed of sale, although e/e&uted in a publi& do&ument,
was not registered. -his deed ma*es no referen&e to the building ere&ted on the land and would appear to have been
e/e&uted for the purpose of &uring any defe&ts whi&h might be found to e/ist in the ma&hinery &ompany)s title to the building
under the sheriB)s &erti:&ate of sale. -he ma&hinery &ompany went into possession of the building at or about the time when
this sale too* pla&e, that is to say, the month of 1e&ember, !"!6, and it has &ontinued in possession ever sin&e.
.t or about the time when the &hattel mortgage was e/e&uted in favor of the ma&hinery &ompany, the mortgagor, the
=CompaQia .gri&ola >ilipina= e/e&uted another mortgage to the plaintiB upon the building, separate and apart from the land
on whi&h it stood, to se&ure payment of the balan&e of its indebtedness to the plaintiB under a &ontra&t for the &onstru&tion of
the building. ;pon the failure of the mortgagor to pay the amount of the indebtedness se&ured by the mortgage, the plaintiB
se&ured 8udgment for that amount, levied e/e&ution upon the building, bought it in at the sheriB)s sale on or about the !4th of
1e&ember, !"!#, and had the sheriB)s &erti:&ate of the sale duly registered in the land registry of the ,rovin&e of Cavite.
.t the time when the e/e&ution was levied upon the building, the defendant ma&hinery &ompany, whi&h was in possession,
:led with the sheriB a sworn statement setting up its &laim of title and demanding the release of the property from the levy.
-hereafter, upon demand of the sheriB, the plaintiB e/e&uted an indemnity bond in favor of the sheriB in the sum of ,!2,555,
in relian&e upon whi&h the sheriB sold the property at publi& au&tion to the plaintiB, who was the highest bidder at the
sheriB)s sale.
-his a&tion was instituted by the plaintiB to re&over possession of the building from the ma&hinery &ompany.
-he trial 8udge, relying upon the terms of arti&le !#06 of the Civil Code, gave 8udgment in favor of the ma&hinery &ompany, on
the ground that the &ompany had its title to the building registered prior to the date of registry of the plaintiB)s &erti:&ate.
.rti&le !#06 of the Civil Code is as followsE
+f the same thing should have been sold to diBerent vendees, the ownership shall be transfer to the person who may
have the :rst ta*en possession thereof in good faith, if it should be personal property.
Should it be real property, it shall belong to the person a&quiring it who :rst re&orded it in the registry.
Should there be no entry, the property shall belong to the person who :rst too* possession of it in good faith, and, in
the absen&e thereof, to the person who presents the oldest title, provided there is good faith.
-he registry her referred to is of &ourse the registry of real property, and it must be apparent that the annotation or
ins&ription of a deed of sale of real property in a &hattel mortgage registry &annot be given the legal eBe&t of an ins&ription in
the registry of real property. By its e/press terms, the Chattel ortgage Law &ontemplates and ma*es provision for mortgages
of personal propertyA and the sole purpose and ob8e&t of the &hattel mortgage registry is to provide for the registry of =Chattel
mortgages,= that is to say, mortgages of personal property e/e&uted in the manner and form pres&ribed in the statute. -he
building of strong materials in whi&h the ri&e-&leaning ma&hinery was installed by the =CompaQia .gri&ola >ilipina= was real
property, and the mere fa&t that the parties seem to have dealt with it separate and apart from the land on whi&h it stood in
no wise &hanged its &hara&ter as real property. +t follows that neither the original registry in the &hattel mortgage of the
building and the ma&hinery installed therein, not the annotation in that registry of the sale of the mortgaged property, had
any eBe&t whatever so far as the building was &on&erned.
7e &on&lude that the ruling in favor of the ma&hinery &ompany &annot be sustained on the ground assigned by the trial
8udge. 7e are of opinion, however, that the 8udgment must be sustained on the ground that the agreed statement of fa&ts in
the &ourt below dis&loses that neither the pur&hase of the building by the plaintiB nor his ins&ription of the sheriB)s &erti:&ate
of sale in his favor was made in good faith, and that the ma&hinery &ompany must be held to be the owner of the property
under the third paragraph of the above &ited arti&le of the &ode, it appearing that the &ompany :rst too* possession of the
propertyA and further, that the building and the land were sold to the ma&hinery &ompany long prior to the date of the
sheriB)s sale to the plaintiB.
+t has been suggested that sin&e the provisions of arti&le !#06 of the Civil Code require =good faith,= in e/press terms, in
relation to =possession= and =title,= but &ontain no e/press requirement as to =good faith= in relation to the =ins&ription= of the
property on the registry, it must be presumed that good faith is not an essential requisite of registration in order that it may
have the eBe&t &ontemplated in this arti&le. 7e &annot agree with this &ontention. +t &ould not have been the intention of the
legislator to base the preferential right se&ured under this arti&le of the &ode upon an ins&ription of title in bad faith. Su&h an
interpretation pla&ed upon the language of this se&tion would open wide the door to fraud and &ollusion. -he publi& re&ords
&annot be &onverted into instruments of fraud and oppression by one who se&ures an ins&ription therein in bad faith. -he
for&e and eBe&t given by law to an ins&ription in a publi& re&ord presupposes the good faith of him who enters su&h
ins&riptionA and rights &reated by statute, whi&h are predi&ated upon an ins&ription in a publi& registry, do not and &annot
a&&rue under an ins&ription =in bad faith,= to the bene:t of the person who thus ma*es the ins&ription.
Construing the se&ond paragraph of this arti&le of the &ode, the supreme &ourt of Spain held in its senten&ia of the !6th of
ay, !"54, thatE
-his rule is always to be understood on the basis of the good faith mentioned in the :rst paragraphA therefore, it
having been found that the se&ond pur&hasers who re&ord their pur&hase had *nowledge of the previous sale, the
question is to be de&ided in a&&ordan&e with the following paragraph. ?<ote 2, art. !#06, Civ. Code, edina and
aranon L!"!!M edition.@
.lthough arti&le !#06, in its se&ond paragraph, provides that the title of &onveyan&e of ownership of the real property
that is :rst re&orded in the registry shall have preferen&e, this provision must always be understood on the basis of
the good faith mentioned in the :rst paragraphA the legislator &ould not have wished to stri*e it out and to
san&tion &ad fait%, 8ust to &omply with a mere formality whi&h, in given &ases, does not obtain even in real disputes
between third persons. ?<ote 2, art. !#06, Civ. Code, issued by the publishers of the La Re*ista de los Tri&unales,
!6th edition.@
-he agreed statement of fa&ts &learly dis&loses that the plaintiB, when he bought the building at the sheriB)s sale and
ins&ribed his title in the land registry, was duly noti:ed that the ma&hinery &ompany had bought the building from plaintiB)s
8udgment debtorA that it had gone into possession long prior to the sheriB)s saleA and that it was in possession at the time
when the sheriB e/e&uted his levy. -he e/e&ution of an indemnity bond by the plaintiB in favor of the sheriB, after the
ma&hinery &ompany had :led its sworn &laim of ownership, leaves no room for doubt in this regard. Gaving bought in the
building at the sheriB)s sale with full *nowledge that at the time of the levy and sale the building had already been sold to the
ma&hinery &ompany by the 8udgment debtor, the plaintiB &annot be said to have been a pur&haser in good faithA and of
&ourse, the subsequent ins&ription of the sheriB)s &erti:&ate of title must be held to have been tainted with the same defe&t.
,erhaps we should ma*e it &lear that in holding that the ins&ription of the sheriB)s &erti:&ate of sale to the plaintiB was not
made in good faith, we should not be understood as questioning, in any way, the good faith and genuineness of the plaintiB)s
&laim against the =CompaQia .gri&ola >ilipina.= -he truth is that both the plaintiB and the defendant &ompany appear to have
had 8ust and righteous &laims against their &ommon debtor. <o &riti&ism &an properly be made of the e/er&ise of the utmost
diligen&e by the plaintiB in asserting and e/er&ising his right to re&over the amount of his &laim from the estate of the
&ommon debtor. 7e are strongly in&lined to believe that in pro&uring the levy of e/e&ution upon the fa&tory building and in
buying it at the sheriB)s sale, he &onsidered that he was doing no more than he had a right to do under all the &ir&umstan&es,
and it is highly possible and even probable that he thought at that time that he would be able to maintain his position in a
&ontest with the ma&hinery &ompany. -here was no &ollusion on his part with the &ommon debtor, and no thought of the
perpetration of a fraud upon the rights of another, in the ordinary sense of the word. Ge may have hoped, and doubtless he
did hope, that the title of the ma&hinery &ompany would not stand the test of an a&tion in a &ourt of lawA and if later
developments had &on:rmed his unfounded hopes, no one &ould question the legality of the propriety of the &ourse he
adopted.
But it appearing that he had full *nowledge of the ma&hinery &ompany)s &laim of ownership when he e/e&uted the indemnity
bond and bought in the property at the sheriB)s sale, and it appearing further that the ma&hinery &ompany)s &laim of
ownership was well founded, he &annot be said to have been an inno&ent pur&haser for value. Ge too* the ris* and must
stand by the &onsequen&esA and it is in this sense that we :nd that he was not a pur&haser in good faith.
'ne who pur&hases real estate with *nowledge of a defe&t or la&* of title in his vendor &annot &laim that he has a&quired title
thereto in good faith as against the true owner of the land or of an interest thereinA and the same rule must be applied to one
who has *nowledge of fa&ts whi&h should have put him upon su&h inquiry and investigation as might be ne&essary to
a&quaint him with the defe&ts in the title of his vendor. . pur&haser &annot &lose his eyes to fa&ts whi&h should put a
reasonable man upon his guard, and then &laim that he a&ted in good faith under the belief that there was no defe&t in the
title of the vendor. Gis mere refusal to believe that su&h defe&t e/ists, or his willful &losing of his eyes to the possibility of the
e/isten&e of a defe&t in his vendor)s title, will not ma*e him an inno&ent pur&haser for value, if afterwards develops that the
title was in fa&t defe&tive, and it appears that he had su&h noti&e of the defe&ts as would have led to its dis&overy had he
a&ted with that measure of pre&aution whi&h may reasonably be a&quired of a prudent man in a li*e situation. Dood faith, or
la&* of it, is in its analysis a question of intentionA but in as&ertaining the intention by whi&h one is a&tuated on a given
o&&asion, we are ne&essarily &ontrolled by the eviden&e as to the &ondu&t and outward a&ts by whi&h alone the inward motive
may, with safety, be determined. So it is that =the honesty of intention,= =the honest lawful intent,= whi&h &onstitutes good
faith implies a =freedom from *nowledge and &ir&umstan&es whi&h ought to put a person on inquiry,= and so it is that proof of
su&h *nowledge over&omes the presumption of good faith in whi&h the &ourts always indulge in the absen&e of proof to the
&ontrary. =Dood faith, or the want of it, is not a visible, tangible fa&t that &an be seen or tou&hed, but rather a state or
&ondition of mind whi&h &an only be 8udged of by a&tual or fan&ied to*ens or signs.= ?7ilder *s. Dilman, 33 %t., 35#, 353A Cf.
Cardenas Lumber Co. *s. Shadel, 32 La. .nn., 25"#-25"4A ,in*erton Bros. Co. *s. Bromley, !!" i&h., 4, !5, !0.@
7e &on&lude that upon the grounds herein set forth the disposing part of the de&ision and 8udgment entered in the &ourt
below should be aCrmed with &osts of this instan&e against the appellant. So ordered.
G.R. No. L-/0/11 $u4us5 7, 1905
,$$O #$3 -ILL !O., IN!., plaintiB-appellant,
vs.
$PRONI$NO G. !$#"ILLO a&' ,$$O LIG(" 6 PO3ER !O., IN!., defendants-appellees.
+rsenio Suazo and "ose L. Palma Gil and Pa&lo Lorenzo and Del:n "o*en for appellant.
".A. .errier for appellees.
-$L!OL-, J.:
-he issue in this &ase, as announ&ed in the opening senten&e of the de&ision in the trial &ourt and as set forth by &ounsel for
the parties on appeal, involves the determination of the nature of the properties des&ribed in the &omplaint. -he trial 8udge
found that those properties were personal in nature, and as a &onsequen&e absolved the defendants from the &omplaint, with
&osts against the plaintiB.
-he 1avao Saw ill Co., +n&., is the holder of a lumber &on&ession from the Dovernment of the ,hilippine +slands. +t has
operated a sawmill in the sitio of aa, barrio of -igatu, muni&ipality of 1avao, ,rovin&e of 1avao. Gowever, the land upon
whi&h the business was &ondu&ted belonged to another person. 'n the land the sawmill &ompany ere&ted a building whi&h
housed the ma&hinery used by it. Some of the implements thus used were &learly personal property, the &onKi&t &on&erning
ma&hines whi&h were pla&ed and mounted on foundations of &ement. +n the &ontra&t of lease between the sawmill &ompany
and the owner of the land there appeared the following provisionE
-hat on the e/piration of the period agreed upon, all the improvements and buildings introdu&ed and ere&ted by the
party of the se&ond part shall pass to the e/&lusive ownership of the party of the :rst part without any obligation on
its part to pay any amount for said improvements and buildingsA also, in the event the party of the se&ond part
should leave or abandon the land leased before the time herein stipulated, the improvements and buildings shall
li*ewise pass to the ownership of the party of the :rst part as though the time agreed upon had e/piredE ,rovided,
however, -hat the ma&hineries and a&&essories are not in&luded in the improvements whi&h will pass to the party of
the :rst part on the e/piration or abandonment of the land leased.
+n another a&tion, wherein the 1avao Light I ,ower Co., +n&., was the plaintiB and the 1avao, Saw, ill Co., +n&., was the
defendant, a 8udgment was rendered in favor of the plaintiB in that a&tion against the defendant in that a&tionA a writ of
e/e&ution issued thereon, and the properties now in question were levied upon as personalty by the sheriB. <o third party
&laim was :led for su&h properties at the time of the sales thereof as is borne out by the re&ord made by the plaintiB herein.
+ndeed the bidder, whi&h was the plaintiB in that a&tion, and the defendant herein having &onsummated the sale, pro&eeded
to ta*e possession of the ma&hinery and other properties des&ribed in the &orresponding &erti:&ates of sale e/e&uted in its
favor by the sheriB of 1avao.
.s &onne&ting up with the fa&ts, it should further be e/plained that the 1avao Saw ill Co., +n&., has on a number of o&&asions
treated the ma&hinery as personal property by e/e&uting &hattel mortgages in favor of third persons. 'ne of su&h persons is
the appellee by assignment from the original mortgages.
.rti&le 66#, paragraphs ! and 3, of the Civil Code, is in point. .&&ording to the Code, real property &onsists of F
!. Land, buildings, roads and &onstru&tions of all *inds adhering to the soilA
/ / / / / / / / /
3. a&hinery, liquid &ontainers, instruments or implements intended by the owner of any building or land for use in
&onne&tion with any industry or trade being &arried on therein and whi&h are e/pressly adapted to meet the
requirements of su&h trade of industry.
.ppellant emphasizes the :rst paragraph, and appellees the last mentioned paragraph. 7e entertain no doubt that the trial
8udge and appellees are right in their appre&iation of the legal do&trines Kowing from the fa&ts.
+n the :rst pla&e, it must again be pointed out that the appellant should have registered its protest before or at the time of the
sale of this property. +t must further be pointed out that while not &on&lusive, the &hara&terization of the property as &hattels
by the appellant is indi&ative of intention and impresses upon the property the &hara&ter determined by the parties. +n this
&onne&tion the de&ision of this &ourt in the &ase of Standard 'il Co. of <ew Hor**s. (aramillo ? L!"26M, ## ,hil., $65@,
whether o&iter dicta or not, furnishes the *ey to su&h a situation.
+t is, however not ne&essary to spend overly must time in the resolution of this appeal on side issues. +t is ma&hinery whi&h is
involvedA moreover, ma&hinery not intended by the owner of any building or land for use in &onne&tion therewith, but
intended by a lessee for use in a building ere&ted on the land by the latter to be returned to the lessee on the e/piration or
abandonment of the lease.
. similar question arose in ,uerto 9i&o, and on appeal being ta*en to the ;nited States Supreme Court, it was held that
ma&hinery whi&h is movable in its nature only be&omes immobilized when pla&ed in a plant by the owner of the property or
plant, but not when so pla&ed by a tenant, a usufru&tuary, or any person having only a temporary right, unless su&h person
a&ted as the agent of the owner. +n the opinion written by Chief (usti&e 7hite, whose *nowledge of the Civil Law is well *nown,
it was in part saidE
-o determine this question involves :/ing the nature and &hara&ter of the property from the point of view of the
rights of %aldes and its nature and &hara&ter from the point of view of <evers I Callaghan as a 8udgment &reditor of
the .ltagra&ia Company and the rights derived by them from the e/e&ution levied on the ma&hinery pla&ed by the
&orporation in the plant. >ollowing the Code <apoleon, the ,orto 9i&an Code treats as immovable ?real@ property, not
only land and buildings, but also attributes immovability in some &ases to property of a movable nature, that is,
personal property, be&ause of the destination to whi&h it is applied. =-hings,= says se&tion 66# of the ,orto 9i&an
Code, =may be immovable either by their own nature or by their destination or the ob8e&t to whi&h they are
appli&able.= <umerous illustrations are given in the :fth subdivision of se&tion 663, whi&h is as followsE =a&hinery,
vessels, instruments or implements intended by the owner of the tenements for the industrial or wor*s that they may
&arry on in any building or upon any land and whi&h tend dire&tly to meet the needs of the said industry or wor*s.=
?See also Code <ap., arti&les 3!$, 3!4 et se'. to and in&lusive of arti&le 36#, re&apitulating the things whi&h, though
in themselves movable, may be immobilized.@ So far as the sub8e&t-matter with whi&h we are dealing F ma&hinery
pla&ed in the plant F it is plain, both under the provisions of the ,orto 9i&an Law and of the Code <apoleon, that
ma&hinery whi&h is movable in its nature only be&omes immobilized when pla&ed in a plant by the owner of the
property or plant. Su&h result would not be a&&omplished, therefore, by the pla&ing of ma&hinery in a plant by a
tenant or a usufru&tuary or any person having only a temporary right. ?1emolombe, -it. ", <o. 256A .ubry et 9au, -it.
2, p. !2, Se&tion !$#A Laurent, -it. 3, <o. ##0A and de&isions quoted in >uzier-German ed. Code <apoleon under
arti&les 322 et se'.@ -he distin&tion rests, as pointed out by 1emolombe, upon the fa&t that one only having a
temporary right to the possession or en8oyment of property is not presumed by the law to have applied movable
property belonging to him so as to deprive him of it by &ausing it by an a&t of immobilization to be&ome the property
of another. +t follows that abstra&tly spea*ing the ma&hinery put by the .ltagra&ia Company in the plant belonging to
San&hez did not lose its &hara&ter of movable property and be&ome immovable by destination. But in the &on&rete
immobilization too* pla&e be&ause of the e/press provisions of the lease under whi&h the .ltagra&ia held, sin&e the
lease in substan&e required the putting in of improved ma&hinery, deprived the tenant of any right to &harge against
the lessor the &ost su&h ma&hinery, and it was e/pressly stipulated that the ma&hinery so put in should be&ome a
part of the plant belonging to the owner without &ompensation to the lessee. ;nder su&h &onditions the tenant in
putting in the ma&hinery was a&ting but as the agent of the owner in &omplian&e with the obligations resting upon
him, and the immobilization of the ma&hinery whi&h resulted arose in legal eBe&t from the a&t of the owner in giving
by &ontra&t a permanent destination to the ma&hinery.
/ / / / / / / / /
-he ma&hinery levied upon by <evers I Callaghan, that is, that whi&h was pla&ed in the plant by the .ltagra&ia
Company, being, as regards <evers I Callaghan, movable property, it follows that they had the right to levy on it
under the e/e&ution upon the 8udgment in their favor, and the e/er&ise of that right did not in a legal sense &onKi&t
with the &laim of %aldes, sin&e as to him the property was a part of the realty whi&h, as the result of his obligations
under the lease, he &ould not, for the purpose of &olle&ting his debt, pro&eed separately against. ?%aldes *s. Central
.ltagra&ia L!"2M, 223 ;.S., 34.@
>inding no reversible error in the re&ord, the 8udgment appealed from will be aCrmed, the &osts of this instan&e to be paid by
the appellant.
-illa@Real !mperial Butte and Goddard "". concur.
G.R. No. L-2.278 $u4us5 /, 1927
LEON #I+$L , plaintiB-appellant,
vs.
E-ILI$NO %. $L,EZ E" $L., defendants.
E-ILI$NO %. $L,EZ, appellee.
". ,. Blanco for appellant.
.eli> B. Bautista and Santos and Benitez for appellee.
%O(N#ON, J.:
-he a&tion was &ommen&ed in the Court of >irst +nstan&e of the ,rovin&e of -arla& on the !#th day of 1e&ember !"2#. -he
fa&ts are about as &onKi&ting as it is possible for fa&ts to be, in the trial &auses.
.s a :rst &ause of a&tion the plaintiB alleged that the defendant %italiano amawal, deputy sheriB of the ,rovin&e of -arla&,
by virtue of a writ of e/e&ution issued by the Court of >irst +nstan&e of ,ampanga, atta&hed and sold to the defendant
Emiliano (. %aldez the sugar &ane planted by the plaintiB and his tenants on seven par&els of land des&ribed in the &omplaint
in the third paragraph of the :rst &ause of a&tionA that within one year from the date of the atta&hment and sale the plaintiB
oBered to redeem said sugar &ane and tendered to the defendant %aldez the amount suC&ient to &over the pri&e paid by the
latter, the interest thereon and any assessments or ta/es whi&h he may have paid thereon after the pur&hase, and the
interest &orresponding thereto and that %aldez refused to a&&ept the money and to return the sugar &ane to the plaintiB.
.s a se&ond &ause of a&tion, the plaintiB alleged that the defendant Emiliano (. %aldez was attempting to harvest the palay
planted in four of the seven par&els mentioned in the :rst &ause of a&tionA that he had harvested and ta*en possession of the
palay in one of said seven par&els and in another par&el des&ribed in the se&ond &ause of a&tion, amounting to 655 &avansA
and that all of said palay belonged to the plaintiB.
,laintiB prayed that a writ of preliminary in8un&tion be issued against the defendant Emiliano (. %aldez his attorneys and
agents, restraining them ?!@ from distributing him in the possession of the par&els of land des&ribed in the &omplaintA ?2@ from
ta*ing possession of, or harvesting the sugar &ane in questionA and ?6@ from ta*ing possession, or harvesting the palay in said
par&els of land. ,laintiB also prayed that a 8udgment be rendered in his favor and against the defendants ordering them to
&onsent to the redemption of the sugar &ane in question, and that the defendant %aldez be &ondemned to pay to the plaintiB
the sum of ,!,53$ the value of palay harvested by him in the two par&els above-mentioned ,with interest and &osts.
'n 1e&ember 20, !"2#, the &ourt, after hearing both parties and upon approval of the bond for ,$,555 :led by the plaintiB,
issued the writ of preliminary in8un&tion prayed for in the &omplaint.
-he defendant Emiliano (. %aldez, in his amended answer, denied generally and spe&i:&ally ea&h and every allegation of the
&omplaint and step up the following defensesE
?a@ -hat the sugar &ane in question had the nature of personal property and was not, therefore, sub8e&t to
redemptionA
?&@ -hat he was the owner of par&els !, 2 and 0 des&ribed in the :rst &ause of a&tion of the &omplaintA
?c@ -hat he was the owner of the palay in par&els !, 2 and 0A and
?d@ -hat he never attempted to harvest the palay in par&els # and 3.
-he defendant Emiliano (. %aldez by way of &ounter&laim, alleged that by reason of the preliminary in8un&tion he was unable
to gather the sugar &ane, sugar-&ane shoots ?puntas de cana dulce@ palay in said par&els of land, representing a loss to him of
,4,603.25 and that, in addition thereto, he suBered damages amounting to ,6,#34.3$. Ge prayed, for a 8udgment ?!@
absolving him from all liability under the &omplaintA ?2@ de&laring him to be the absolute owner of the sugar &ane in question
and of the palay in par&els !, 2 and 0A and ?6@ ordering the plaintiB to pay to him the sum of ,!!,466.0$, representing the
value of the sugar &ane and palay in question, in&luding damages.
;pon the issues thus presented by the pleadings the &ause was brought on for trial. .fter hearing the eviden&e, and on .pril
24, !"2$, the Gonorable Cayetano Lu*ban, 8udge, rendered a 8udgment against the plaintiB and in favor of the defendants F
?!@ Golding that the sugar &ane in question was personal property and, as su&h, was not sub8e&t to redemptionA
?2@ .bsolving the defendants from all liability under the &omplaintA and
?6@ Condemning the plaintiB and his sureties Cenon de la Cruz, (uan Sangalang and ar&os Sibal to 8ointly and
severally pay to the defendant Emiliano (. %aldez the sum of ,",#6".54 as followsE
?a@ ,$,030.#5, the value of the sugar &aneA
?b@ !,#63.$4, the value of the sugar-&ane shootsA
?&@ $#$.55, the value of palay harvested by plaintiBA
?d@ $55.55, the value of !35 &avans of palay whi&h the defendant was not able to raise by reason of the
in8un&tion, at ,# &avan. ",#6".54 >rom that 8udgment the plaintiB appealed and in his assignments of error
&ontends that the lower &ourt erredE ?!@ +n holding that the sugar &ane in question was personal property
and, therefore, not sub8e&t to redemptionA
?2@ +n holding that par&els ! and 2 of the &omplaint belonged to %aldez, as well as par&els 0 and 4, and that the palay
therein was planted by %aldezA
?6@ +n holding that %aldez, by reason of the preliminary in8un&tion failed to realized ,$,030.#5 from the sugar &ane
and ,!,#63.$4 from sugar-&ane shoots ?puntas de &ana dul&e@A
?#@ +n holding that, for failure of plaintiB to gather the sugar &ane on time, the defendant was unable to raise palay on
the land, whi&h would have netted him the sum of ,$55A and.
?3@ +n &ondemning the plaintiB and his sureties to pay to the defendant the sum of ,",#6".54.
+t appears from the re&ordE
?!@ -hat on ay !!, !"26, the deputy sheriB of the ,rovin&e of -arla&, by virtue of writ of e/e&ution in &ivil &ase <o.
25256 of the Court of >irst +nstan&e of anila ?a&ondray I Co., +n&. *s. Leon Sibal@,levied an atta&hment on eight
par&els of land belonging to said Leon Sibal, situated in the ,rovin&e of -arla&, designated in the se&ond of
atta&hment as par&els !, 2, 6, #, 3, $, 0 and 4 ?E/hibit B, E/hibit 2-.@.
?2@ -hat on (uly 65, !"26, a&ondray I Co., +n&., bought said eight par&els of land, at the au&tion held by the sheriB
of the ,rovin&e of -arla&, for the sum to ,#,206."6, having paid for the said par&els separately as follows ?E/hibit C,
and 2-.@E
,ar&el
! ..................................................................
...
,!.55
2 ..................................................................
...
2,555.55
6 ..................................................................
...
!25."6
# ..................................................................
...
!,555.55
3 ..................................................................
...
!.55
$ ..................................................................
...
!.55
0 with the house thereon .......................... !35.55
4 ..................................................................
...
!,555.55
RRRRRRRR
RR
#,206."6
?6@ -hat within one year from the sale of said par&el of land, and on the 2#th day of September, !"26, the 8udgment
debtor, Leon Sibal, paid ,2,555 to a&ondray I Co., +n&., for the a&&ount of the redemption pri&e of said par&els of
land, without spe&ifying the parti&ular par&els to whi&h said amount was to applied. -he redemption pri&e said eight
par&els was redu&ed, by virtue of said transa&tion, to ,2,30"."0 in&luding interest ?E/hibit C and 2@.
-he re&ord further showsE
?!@ -hat on .pril 2", !"2#, the defendant %italiano amawal, deputy sheriB of the ,rovin&e of -arla&, by virtue of a
writ of e/e&ution in &ivil &ase <o. !65! of the ,rovin&e of ,ampanga ?Emiliano (. %aldez *s. Leon Sibal !.S F the same
parties in the present &ase@, atta&hed the personal property of said Leon Sibal lo&ated in -arla&, among whi&h was
in&luded the sugar &ane now in question in the seven par&els of land des&ribed in the &omplaint ?E/hibit .@.
?2@ -hat on ay " and !5, !"2#, said deputy sheriB sold at publi& au&tion said personal properties of Leon Sibal,
in&luding the sugar &ane in question to Emilio (. %aldez, who paid therefor the sum of ,!,335, of whi&h ,$55 was for
the sugar &ane ?E/hibit .@.
?6@ -hat on .pril 2",!"2#, said deputy sheriB, by virtue of said writ of e/e&ution, also atta&hed the real property of
said Leon Sibal in -arla&, in&luding all of his rights, interest and parti&ipation therein, whi&h real property &onsisted of
eleven par&els of land and a house and &amarin situated in one of said par&els ?E/hibit .@.
?#@ -hat on (une 23, !"2#, eight of said eleven par&els, in&luding the house and the &amarin, were bought by Emilio (.
%aldez at the au&tion held by the sheriB for the sum of ,!2,255. Said eight par&els were designated in the &erti:&ate
of sale as par&els !, 6, #, 3, $, 0, !5 and !!. -he house and &amarin were situated on par&el 0 ?E/hibit .@.
?3@ -hat the remaining three par&els, indi&ated in the &erti:&ate of the sheriB as par&els 2, !2, and !6, were released
from the atta&hment by virtue of &laims presented by .gustin Cuyugan and 1omi&iano -izon ?E/hibit .@.
?$@ -hat on the same date, (une 23, !"2#, a&ondray I Co. sold and &onveyed to Emilio (. %aldez for ,2,30"."0 all of
its rights and interest in the eight par&els of land a&quired by it at publi& au&tion held by the deputy sheriB of -arla&
in &onne&tion with &ivil &ase <o. 25256 of the Court of >irst +nstan&e of anila, as stated above. Said amount
represented the unpaid balan&e of the redemption pri&e of said eight par&els, after payment by Leon Sibal of ,2,555
on September 2#, !"26, fro the a&&ount of the redemption pri&e, as stated above. ?E/hibit C and 2@.
-he foregoing statement of fa&ts showsE
?!@ -he Emilio (. %aldez bought the sugar &ane in question, lo&ated in the seven par&els of land des&ribed in the :rst
&ause of a&tion of the &omplaint at publi& au&tion on ay " and !5, !"2#, for ,$55.
?2@ -hat on (uly 65, !"26, a&ondray I Co. be&ame the owner of eight par&els of land situated in the ,rovin&e of
-arla& belonging to Leon Sibal and that on September 2#, !"26, Leon Sibal paid to a&ondray I Co. ,2,555 for the
a&&ount of the redemption pri&e of said par&els.
?6@ -hat on (une 23, !"2#, Emilio (. %aldez a&quired from a&ondray I Co. all of its rights and interest in the said
eight par&els of land.
?#@ -hat on (une 23, !"2#, Emilio (. %aldez also a&quired all of the rights and interest whi&h Leon Sibal had or might
have had on said eight par&els by virtue of the ,2,555 paid by the latter to a&ondray.
?3@ -hat Emilio (. %aldez be&ame the absolute owner of said eight par&els of land.
-he :rst question raised by the appeal is, whether the sugar &ane in question is personal or real property. +t is &ontended that
sugar &ane &omes under the &lassi:&ation of real property as =ungathered produ&ts= in paragraph 2 of arti&le 66# of the Civil
Code. Said paragraph 2 of arti&le 66# enumerates as real property the followingE -rees, plants, and ungathered produ&ts,
while they are anne/ed to the land or form an integral part of any immovable property.= -hat arti&le, however, has re&eived in
re&ent years an interpretation by the Tri&unal Supremo de ,spa?a, whi&h holds that, under &ertain &onditions, growing &rops
may be &onsidered as personal property. ?1e&ision of ar&h !4, !"5#, vol. "0, Civil (urispruden&e of Spain.@
anresa, the eminent &ommentator of the Spanish Civil Code, in dis&ussing se&tion 66# of the Civil Code, in view of the
re&ent de&isions of the supreme Court of Spain, admits that growing &rops are sometimes &onsidered and treated as personal
property. Ge saysE
<o &reemos, sin embargo, que esto e/&luya la e/&ep&ionque mu&hos autores ha&en to&ante a la venta de toda
&ose&ha o de parte de ella &uando aun no esta &ogida ?&osa fre&uente &on la uvay y la naran8a@, y a la de lenas,
&onsiderando ambas &omo mue&les. El -ribunal Supremo, en senten&ia de !4 de marzo de !"5#, al entender sobre
un &ontrato de arrendamiento de un predio rusti&o, resuelve que su termina&ion por desahu&io no e/tingue los
dere&hos del arrendario, para re&ole&tar o per&ibir los frutos &orrespondientes al aQo agri&ola, dentro del que
na&ieron aquellos dere&hos, &uando el arrendor ha per&ibido a su vez el importe de la renta integra &orrespondiente,
aun &uando lo haya sido por pre&epto legal durante el &urso del 8ui&io, fundandose para ello, no solo en que de otra
suerte se daria al desahu&io un al&an&e que no tiene, sino en que, y esto es lo interesante a nuestro proposito, la
consideracion de inmue&les 'ue el articulo 559 del Codi$o Ci*il atri&u$e a los frutos pendientes no les pri*a del
caracter de productos pertenecientes como tales a 'uienes a ellos ten$a derec%o, +legado el momento de su
re&ole&&ion.
/ / / / / / / / /
as a&tualmente y por virtud de la nueva edi&ion de la Ley Gipote&aria, publi&ada en !$ de di&iembre de !"5", &on
las reformas introdu&idas por la de 2! de abril anterior, la hipote&a, salvo pa&to e/preso que disponga lo &ontrario, y
&ualquiera que sea la naturaleza y forma de la obliga&ion que garanti&e, no comprende los frutos &ualquiera que sea
la situa&ion en que se en&uentre. ?6 anresa, 3. edi&ion, pags. 22, 26.@
>rom the foregoing it appears ?!@ that, under Spanish authorities, pending fruits and ungathered produ&ts may be sold and
transferred as personal propertyA ?2@ that the Supreme Court of Spain, in a &ase of e8e&tment of a lessee of an agri&ultural
land, held that the lessee was entitled to gather the produ&ts &orresponding to the agri&ultural year, be&ause said fruits did
not go with the land but belonged separately to the lesseeA and ?6@ that under the Spanish ortgage Law of !"5", as
amended, the mortgage of a pie&e of land does not in&lude the fruits and produ&ts e/isting thereon, unless the &ontra&t
e/pressly provides otherwise.
.n e/amination of the de&isions of the Supreme Court of Louisiana may give us some light on the question whi&h we are
dis&ussing. .rti&le #$3 of the Civil Code of Louisiana, whi&h &orresponds to paragraph 2 of arti&le 66# of our Civil Code,
providesE =Standing &rops and the fruits of trees not gathered, and trees before they are &ut down, are li*ewise immovable,
and are &onsidered as part of the land to whi&h they are atta&hed.=
-he Supreme Court of Louisiana having o&&asion to interpret that provision, held that in some &ases =standing &rops= may be
&onsidered and dealt with as personal property. +n the &ase of Lum&er Co. *s. S%eriB and Ta> Collector ?!5$ La., #!4@ the
Supreme Court saidE =-rue, by arti&le #$3 of the Civil Code it is provided that )standing &rops and the fruits of trees not
gathered and trees before they are &ut down . . . are &onsidered as part of the land to whi&h they are atta&hed, but the
immovability provided for is only one in abstra&to and without referen&e to rights on or to the &rop a&quired by others than
the owners of the property to whi&h the &rop is atta&hed. . . . -he e/isten&e of a right on the growing &rop is a mobilization by
anti&ipation, a gathering as it were in advan&e, rendering the &rop movable quoad the right a&quired therein. 'ur
8urispruden&e re&ognizes the possible mobilization of the growing &rop.= ?Citizens) Ban* *s. 7iltz, 6! La. .nn., 2##A
,or&he *s. Bodin, 24 La., .nn., 0$!A Sandel *s. 1ouglass, 20 La. .nn., $2"A Lewis *s. Olotz, 6" La. .nn., 2$0.@
=+t is true,= as the Supreme Court of Louisiana said in the &ase of Porc%e *s. Bodin ?24 La. .n., 0$!@ that =arti&le #$3 of the
9evised Code says that standing &rops are &onsidered as immovable and as part of the land to whi&h they are atta&hed, and
arti&le #$$ de&lares that the fruits of an immovable gathered or produ&ed while it is under seizure are &onsidered as ma*ing
part thereof, and in&urred to the bene:t of the person ma*ing the seizure. But the evident meaning of these arti&les, is where
the &rops belong to the owner of the plantation they form part of the immovable, and where it is seized, the fruits gathered or
produ&ed inure to the bene:t of the seizing &reditor.
. &rop raised on leased premises in no sense forms part of the immovable. +t belongs to the lessee, and may be sold
by him, whether it be gathered or not, and it may be sold by his 8udgment &reditors. +f it ne&essarily forms part of the
leased premises the result would be that it &ould not be sold under e/e&ution separate and apart from the land. +f a
lessee obtain supplies to ma*e his &rop, the fa&tor)s lien would not atta&h to the &rop as a separate thing belonging to
his debtor, but the land belonging to the lessor would be aBe&ted with the re&orded privilege. -he law &annot be
&onstrued so as to result in su&h absurd &onsequen&es.
+n the &ase of CitizenCs Ban8 *s. Ailtz ?6! La. .nn., 2##@the &ourt saidE
+f the &rop 'uoad the pledge thereof under the a&t of !40# was an immovable, it would be destru&tive of the very
ob8e&ts of the a&t, it would render the pledge of the &rop ob8e&ts of the a&t, it would render the pledge of the &rop
impossible, for if the &rop was an inseparable part of the realty possession of the latter would be ne&essary to that of
the formerA but su&h is not the &ase. -rue, by arti&le #$3 C. C. it is provided that =standing &rops and the fruits of
trees not gathered and trees before they are &ut down are li*ewise immovable and are &onsidered as part of the land
to whi&h they are atta&hedA= but the immovability provided for is only one in a&stracto and without referen&e to
rights on or to the &rop a&quired by other than the owners of the property to whi&h the &rop was atta&hed. -he
immovability of a growing &rop is in the order of things temporary, for the &rop passes from the state of a growing to
that of a gathered one, from an immovable to a movable. -he e/isten&e of a right on the growing &rop is a
mobilization by anti&ipation, a gathering as it were in advan&e, rendering the &rop movable 'uoad the right a&quired
thereon. -he provision of our Code is identi&al with the <apoleon Code 325, and we may therefore obtain light by an
e/amination of the 8urispruden&e of >ran&e.
-he rule above announ&ed, not only by the Tri&unal Supremo de ,spa?a but by the Supreme Court of Louisiana, is followed in
pra&ti&ally every state of the ;nion.
>rom an e/amination of the reports and &odes of the State of California and other states we :nd that the settle do&trine
followed in said states in &onne&tion with the atta&hment of property and e/e&ution of 8udgment is, that growing &rops raised
by yearly labor and &ultivation are &onsidered personal property. ?$ Corpuz (uris, p. !"0A !0 Corpus (uris, p. 60"A 26 Corpus
(uris, p. 62"E 9aventas *s. Dreen, 30 Cal., 23#A <orris *s. 7atson, 33 .m. 1e&., !$!A 7hipple *s. >oot, 6 .m. 1e&., ##2A !
Ben8amin on Sales, se&. !2$A &Oenzie *s. Lampley, 6! .la., 32$A Crine*s. -ifts and Co., $3 Da., $##A Dillitt *s. -rua/, 20
inn., 324A ,reston *s. 9yan, #3 i&h., !0#A >reeman on E/e&ution, vol. !, p. #64A 1ra*e on .tta&hment, se&. 2#"A e&hem on
Sales, se&. 255 and 0$6.@
r. e&hem says that a valid sale may be made of a thing, whi&h though not yet a&tually in e/isten&e, is reasonably &ertain
to &ome into e/isten&e as the natural in&rement or usual in&ident of something already in e/isten&e, and then belonging to
the vendor, and then title will vest in the buyer the moment the thing &omes into e/isten&e. ?Emerson *s. European 9ailway
Co., $0 e., 640A Cutting *s. ,a&*ers E/&hange, 2! .m. St. 9ep., $6.@ -hings of this nature are said to have a potential
e/isten&e. . man may sell property of whi&h he is potentially and not a&tually possessed. Ge may ma*e a valid sale of the
wine that a vineyard is e/pe&ted to produ&eA or the gain a :eld may grow in a given timeA or the mil* a &ow may yield during
the &oming yearA or the wool that shall thereafter grow upon sheepA or what may be ta*en at the ne/t &ast of a :sherman)s
netA or fruits to growA or young animals not yet in e/isten&eA or the good will of a trade and the li*e. -he thing sold, however,
must be spe&i:& and identi:ed. -hey must be also owned at the time by the vendor. ?Gull *s. Gull, #4 Conn., 235 L#5 .m.
9ep., !$3M.@
+t is &ontended on the part of the appellee that paragraph 2 of arti&le 66# of the Civil Code has been modi:ed by se&tion #35
of the Code of Civil ,ro&edure as well as by .&t <o. !354, the Chattel ortgage Law. Said se&tion #35 enumerates the
property of a 8udgment debtor whi&h may be sub8e&ted to e/e&ution. -he pertinent portion of said se&tion reads as followsE
=.ll goods, &hattels, moneys, and other property, both real and personal, T T T shall be liable to e/e&ution. Said se&tion #35
and most of the other se&tions of the Code of Civil ,ro&edure relating to the e/e&ution of 8udgment were ta*en from the Code
of Civil ,ro&edure of California. -he Supreme Court of California, under se&tion $44 of the Code of Civil ,ro&edure of that state
?,omeroy, p. #2#@ has held, without variation, that growing &rops were personal property and sub8e&t to e/e&ution.
.&t <o. !354, the Chattel ortgage Law, fully re&ognized that growing &rops are personal property. Se&tion 2 of said .&t
providesE =.ll personal property shall be sub8e&t to mortgage, agreeably to the provisions of this .&t, and a mortgage
e/e&uted in pursuan&e thereof shall be termed a &hattel mortgage.= Se&tion 0 in part providesE =+f growing &rops be
mortgaged the mortgage may &ontain an agreement stipulating that the mortgagor binds himself properly to tend, &are for
and prote&t the &rop while growing.
+t is &lear from the foregoing provisions that .&t <o. !354 was ena&ted on the assumption that =growing &rops= are personal
property. -his &onsideration tends to support the &on&lusion hereinbefore stated, that paragraph 2 of arti&le 66# of the Civil
Code has been modi:ed by se&tion #35 of .&t <o. !"5 and by .&t <o. !354 in the sense that =ungathered produ&ts= as
mentioned in said arti&le of the Civil Code have the nature of personal property. +n other words, the phrase =personal
property= should be understood to in&lude =ungathered produ&ts.=
.t &ommon law, and generally in the ;nited States, all annual &rops whi&h are raised by yearly manuran&e and labor,
and essentially owe their annual e/isten&e to &ultivation by man, . may be levied on as personal property.= ?26 C. (.,
p. 62".@ 'n this question >reeman, in his treatise on the Law of E/e&utions, saysE =Crops, whether growing or standing
in the :eld ready to be harvested, are, when produ&ed by annual &ultivation, no part of the realty. -hey are,
therefore, liable to voluntary transfer as &hattels. +t is equally well settled that they may be seized and sold under
e/e&ution. ?>reeman on E/e&utions, vol. p. #64.@
7e may, therefore, &on&lude that paragraph 2 of arti&le 66# of the Civil Code has been modi:ed by se&tion #35 of the Code of
Civil ,ro&edure and by .&t <o. !354, in the sense that, for the purpose of atta&hment and e/e&ution, and for the purposes of
the Chattel ortgage Law, =ungathered produ&ts= have the nature of personal property. -he lower &ourt, therefore, &ommitted
no error in holding that the sugar &ane in question was personal property and, as su&h, was not sub8e&t to redemption.
.ll the other assignments of error made by the appellant, as above stated, relate to questions of fa&t only. Before entering
upon a dis&ussion of said assignments of error, we deem it opportune to ta*e spe&ial noti&e of the failure of the plaintiB to
appear at the trial during the presentation of eviden&e by the defendant. Gis absen&e from the trial and his failure to &ross-
e/amine the defendant have lent &onsiderable weight to the eviden&e then presented for the defense.
Coming not to the ownership of par&els ! and 2 des&ribed in the :rst &ause of a&tion of the &omplaint, the plaintiB made a
futile attempt to show that said two par&els belonged to .gustin Cuyugan and were the identi&al par&el 2 whi&h was e/&luded
from the atta&hment and sale of real property of Sibal to %aldez on (une 23, !"2#, as stated above. . &omparison of the
des&ription of par&el 2 in the &erti:&ate of sale by the sheriB ?E/hibit .@ and the des&ription of par&els ! and 2 of the
&omplaint will readily show that they are not the same.
-he des&ription of the par&els in the &omplaint is as followsE
!. La &aQa dul&e sembrada por los inquilinos del e8e&utado Leon Sibal !.S en una par&ela de terreno de la pertenen&ia
del &itado e8e&utado, situada en Libutad, Culubasa, Bamban, -arla&, de unas dos he&tareas po&o mas o menos de
super:&ie.
2. La &aQa dul&e sembrada por el inquilino del e8e&utado Leon Sibal !.S, +lamado .le8andro ,oli&arpio, en una par&ela
de terreno de la pertenen&ia del e8e&utado, situada en 1alayap, Culubasa, Bamban, -arla& de unas dos he&tareas de
super:&ie po&o mas o menos.= -he des&ription of par&el 2 given in the &erti:&ate of sale ?E/hibit .@ is as followsE
2a. -erreno palayero situado en Culubasa, Bamban, -arla&, de !00,5"5 metros &uadrados de super:&ie, linda al <.
&on Canuto Sibal, Esteban Lazatin and .le8andro 1ayritA al E. &on >ran&is&o 1izon, >elipe aQu and othersA al S. &on
.le8andro 1ayrit, +sidro Santos and ele&io aQuA y al '. &on .le8andro 1ayrit and ,aulino %ergara. -a/ <o. 243#,
vador amillarado ,#,255 pesos.
'n the other hand the eviden&e for the defendant purported to show that par&els ! and 2 of the &omplaint were in&luded
among the par&els bought by %aldez from a&ondray on (une 23, !"2#, and &orresponded to par&el # in the deed of sale
?E/hibit B and 2@, and were also in&luded among the par&els bought by %aldez at the au&tion of the real property of Leon Sibal
on (une 23, !"2#, and &orresponded to par&el 6 in the &erti:&ate of sale made by the sheriB ?E/hibit .@. -he des&ription of
par&el # ?E/hibit 2@ and par&el 6 ?E/hibit .@ is as followsE
Parcels No. 9. F -erreno palayero, ubi&ado en el barrio de Culubasa,Bamban, -arla&, +. >. de !#3,555 metros
&uadrados de super:&ie, lindante al <orte &on 9oad of the barrio of Culubasa that goes to Con&ep&ionA al Este &on
(uan 1izonA al Sur &on Lu&io aQo y Canuto Sibal y al 'este &on Esteban Lazatin, su valor amillarado as&iende a la
suma de ,2,""5. -a/ <o. 243$.
.s will be noti&ed, there is hardly any relation between par&els ! and 2 of the &omplaint and par&el # ?E/hibit 2 and B@ and
par&el 6 ?E/hibit .@. But, inasmu&h as the plaintiB did not &are to appear at the trial when the defendant oBered his eviden&e,
we are in&lined to give more weight to the eviden&e addu&ed by him that to the eviden&e addu&ed by the plaintiB, with
respe&t to the ownership of par&els ! and 2 of the &ompliant. 7e, therefore, &on&lude that par&els ! and 2 of the &omplaint
belong to the defendant, having a&quired the same from a&ondray I Co. on (une 23, !"2#, and from the plaintiB Leon Sibal
on the same date.
+t appears, however, that the plaintiB planted the palay in said par&els and harvested therefrom !"5 &avans. -here being no
eviden&e of bad faith on his part, he is therefore entitled to one-half of the &rop, or "3 &avans. Ge should therefore be
&ondemned to pay to the defendant for "3 &avans only, at ,6.#5 a &avan, or the sum of ,626, and not for the total of !"5
&avans as held by the lower &ourt.
.s to the ownership of par&el 0 of the &omplaint, the eviden&e shows that said par&el &orresponds to par&el ! of the deed of
sale of a&ondray I Co, to %aldez ?E/hibit B and 2@, and to par&el # in the &erti:&ate of sale to %aldez of real property
belonging to Sibal, e/e&uted by the sheriB as above stated ?E/hibit .@. %aldez is therefore the absolute owner of said par&el,
having a&quired the interest of both a&ondray and Sibal in said par&el.
7ith referen&e to the par&el of land in ,a&al&al, -arla&, des&ribed in paragraph 6 of the se&ond &ause of a&tion, it appears from
the testimony of the plaintiB himself that said par&el &orresponds to par&el 4 of the deed of sale of a&ondray to %aldez
?E/hibit B and 2@ and to par&el !5 in the deed of sale e/e&uted by the sheriB in favor of %aldez ?E/hibit .@. %aldez is therefore
the absolute owner of said par&el, having a&quired the interest of both a&ondray and Sibal therein.
+n this &onne&tion the following fa&ts are worthy of mentionE
E/e&ution in favor of a&ondray I Co., ay !!, !"26. Eight par&els of land were atta&hed under said e/e&ution. Said par&els
of land were sold to a&ondray I Co. on the 65th day of (uly, !"26. 9i&e paid ,#,206."6. 'n September 2#, !"26, Leon Sibal
paid to a&ondray I Co. ,2,555 on the redemption of said par&els of land. ?See E/hibits B and C @.
.tta&hment, .pril 2", !"2#, in favor of %aldez. ,ersonal property of Sibal was atta&hed, in&luding the sugar &ane in question.
?E/hibit .@ -he said personal property so atta&hed, sold at publi& au&tion ay " and !5, !"2#. .pril 2", !"2#, the real
property was atta&hed under the e/e&ution in favor of %aldez ?E/hibit .@. (une 23, !"2#, said real property was sold and
pur&hased by %aldez ?E/hibit .@.
(une 23, !"2#, a&ondray I Co. sold all of the land whi&h they had pur&hased at publi& au&tion on the 65th day of (uly, !"26,
to %aldez.
.s to the loss of the defendant in sugar &ane by reason of the in8un&tion, the eviden&e shows that the sugar &ane in question
&overed an area of 22 he&tares and $5 ares ?E/hibits 4, 4-b and 4-&@A that said area would have yielded an average &rop of
!56" pi&os and $5 &atesA that one-half of the quantity, or 3!" pi&os and 45 &ates would have &orresponded to the defendant,
as ownerA that during the season the sugar was selling at ,!6 a pi&o ?E/hibit 3 and 3-.@. -herefore, the defendant, as owner,
would have netted , $,030.#5 from the sugar &ane in question. -he eviden&e also shows that the defendant &ould have ta*en
from the sugar &ane !,5!0,555 sugar-&ane shoots ?puntas de &ana@ and not !,!05,555 as &omputed by the lower &ourt.
1uring the season the shoots were selling at ,!.25 a thousand ?E/hibits $ and 0@. -he defendant therefore would have netted
,!,225.#5 from sugar-&ane shoots and not ,!,#63.$4 as allowed by the lower &ourt.
.s to the palay harvested by the plaintiB in par&els ! and 2 of the &omplaint, amounting to !"5 &avans, one-half of said
quantity should belong to the plaintiB, as stated above, and the other half to the defendant. -he &ourt erred in awarding the
whole &rop to the defendant. -he plaintiB should therefore pay the defendant for "3 &avans only, at ,6.#5 a &avan, or ,626
instead of ,$#$ as allowed by the lower &ourt.
-he eviden&e also shows that the defendant was prevented by the a&ts of the plaintiB from &ultivating about !5 he&tares of
the land involved in the litigation. Ge e/pe&ted to have raised about $55 &avans of palay, 655 &avans of whi&h would have
&orresponded to him as owner. -he lower &ourt has wisely redu&ed his share to !35 &avans only. .t ,# a &avan, the palay
would have netted him ,$55.
+n view of the foregoing, the 8udgment appealed from is hereby modi:ed. -he plaintiB and his sureties Cenon de la Cruz, (uan
Sangalang and ar&os Sibal are hereby ordered to pay to the defendant 8ointly and severally the sum of ,4,"55.45, instead of
,",#6".54 allowed by the lower &ourt, as followsE
,$,030.#5 for the sugar &aneA
!,225.#5 for the sugar &ane shootsA
626.55
for the palay harvested by plaintiB in par&els !
and 2A
$55.55
for the palay whi&h defendant &ould have
raised.
4,"55.45
RRRRRRRRRR
RR
+n all other respe&ts, the 8udgment appealed from is hereby aCrmed, with &osts. So ordered.
Street #alcolm -illamor Romualdez and -illa@Real. "". concur.
RUR$L +$N2 OF $N,$, IN!.,
,etitioner,





- versus -





RO-$N !$"(OLI!
$R!(+I#(OP OF LING$1EN-
,$GUP$N,
9espondent.
G.R. No. 155051

,resentE

U;+S;B+<D, ".
Chairperson,
C.9,+',
C.9,+' '9.LES,
-+<D., and
%EL.SC', (9., "".



,romulgatedE


ay 2", 2550
/ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - /

, E ! I # I O N

!$RPIO, J.:

"7e !ase

-his is a petition for review
L!M
of the 1e&ision
L2M
dated !3 '&tober 255! and the 9esolution dated 26 .ugust 2552 of the
Court of .ppeals in C.-D.9. C% <o. $$#04.



"7e Fa85s

-he lot in dispute, Cadastral Lot 06$ ?Lot 06$@, is lo&ated in the ,obla&ion of Binmaley, ,angasinan. Lot 06$ has a total
area of about !,655 square meters and is part of Lot 6. Cadastral Lot 060 and Lot 06" also form part of Lot 6. Cadastral Lot
060 is *nown as +meldaVs ,ar*, while on Lot 06" is a waiting shed for &ommuters. Lot 6 is bounded on the north by Lot ! of
,lan ++-325!-. and on the south by the national road. +n front of Lot 06$ is the building of ary Gelp of Christians Seminary
?seminary@ whi&h is on Lot !.

Lot ! of ,lan ++-325!-., whi&h ad8oins Lot 6 on the north, is titled in the name of respondent 9oman Catholi& .r&hbishop
of Lingayen ?respondent@ under -ransfer Certi:&ate of -itle <o. $603 ?-C- $603@. .n annotation on -C- $603 states that the
ownership of Lot 6 is being &laimed by both respondent and the uni&ipality of Binmaley.

+n !"34, the 9e&tor of the seminary ordered the &onstru&tion of the fen&e separating Lot 06$ from the national road to
prevent the caretelas from par*ing be&ause the smell of horse manure was already bothering the priests living in the
seminary.
L6M
-he &on&rete fen&e en&losing Lot 06$ has openings in the east, west, and &enter and has no gate. ,eople &an pass
through Lot 06$ at any time of the day.
L#M


'n 22 1e&ember !""0, the Sangguniang Bayan of Binmaley, ,angasinan, passed and approved 9esolution <os.
!5#
L3M
and !53.
L$M
9esolution <o. !5# &onverted Lot 06$ from an institutional lot to a &ommer&ial lot. 9esolution <o. !53
authorized the muni&ipal mayor to enter into a &ontra&t of lease for 23 years with the 9ural Ban* of .nda over a portion of Lot
06$ with an area of 232 square meters.
L0M

+n 1e&ember !""0, >r. .renos, the dire&tor of the seminary, dis&overed that a sawali fen&e was being &onstru&ted
en&losing a portion of Lot 06$. +n (anuary !""4, the uni&ipal ayor of Binmaley, 9olando 1omalanta ?ayor 1omalanta@,
&ame to the seminary to dis&uss the situation. ayor 1omalanta and >r. .renos agreed that the &onstru&tion of the building
for the 9ural Ban* of .nda should be stopped.

'n 2# ar&h !""4, respondent requested ayor 1omalanta to remove the sawali fen&e and restore the &on&rete
fen&e. 'n 25 ay !""4, ayor 1omalanta informed respondent that the &onstru&tion of the building of the 9ural Ban* of
.nda would resume but that he was willing to dis&uss with respondent to resolve the problem &on&erning Lot 06$.

'n ! (une !""4, respondent :led a &omplaint for .batement of +llegal Constru&tions, +n8un&tion and 1amages with 7rit
of ,reliminary +n8un&tion in the 9egional -rial Court of Lingayen, ,angasinan. 'n 2# .ugust !""4, the trial &ourt ordered the
issuan&e of a writ of preliminary in8un&tion.

'n # (anuary 2555, the trial &ourt rendered a de&ision, the dispositive portion of whi&h readsE

7GE9E>'9E, in the light of the foregoing, 8udgment is hereby rendered in favor of the plaintiB L9oman
Catholi& .r&hbishop of Lingayen-1agupanME

!. a*ing the writ of preliminary in8un&tion permanentA


2. 'rdering the defendants to &ause to be restored the &on&rete wall with iron railings, to &ause to
be removed the sawali fen&e, both at the e/pense of the defendants, 8ointly and severally, and

6. Condemning the defendants to pay 8ointly and severally, to the plaintiB the amount
of ,23,555.55 as litigation e/penses, attorneyVs fees in the amount of ,35,555.55 and the &osts
of this suit.

S' '91E9E1.
L4M



'n appeal, the Court of .ppeals aCrmed the de&ision with the modi:&ation that the awards of litigation e/penses,
attorneyVs fees, and &osts should be deleted. -he Court of .ppeals subsequently denied the motion for re&onsideration of
the uni&ipality of Binmaley and the 9ural Ban* of .nda.


"7e Ru9:&4 o; 57e "r:a9 !our5

-he trial &ourt found that Lot 06$ is not &overed by any -orrens title either in the name of respondent or in the name of
the uni&ipality of Binmaley. -he trial &ourt held that Lot 06$ is publi& in nature. Sin&e Lot 06$ is property of publi& dominion,
it is outside the &ommer&e of man. -hus, the Sangguniang Bayan of Binmaley, ,angasinan e/&eeded its authority when it
adopted 9esolution <os. !5# and !53 &onverting Lot 06$ from an institutional lot to a &ommer&ial lot and authorizing the
muni&ipal mayor to enter into a &ontra&t of lease for 23 years with the 9ural Ban* of .nda over a 232 square meter portion
of Lot 06$ .



"7e Ru9:&4 o; 57e !our5 o; $<<ea9s

-he Court of .ppeals agreed with the trial &ourt that Lot 06$ is property of publi& dominion and is used by the publi& as
a pathway. 9espondent and the uni&ipality of Binmaley are mere &laimants with no suC&ient eviden&e to prove their
ownership of Lot 06$. -he Court of .ppeals held that property of publi& dominion is intended for the &ommon welfare and
&annot be the ob8e&t of appropriation either by the state or by private persons. Sin&e Lot 06$ is for publi& use, it is a property
of publi& dominion and it is not sus&eptible of private ownership. -hus, 9esolution <os. !5# and !53 are void for being
ena&ted beyond the powers of the Sangguniang Bayan of Binmaley. -he &ontra&t of lease between
the uni&ipality ofBinmaley and the 9ural Ban* of .nda is therefore void.

-he Court of .ppeals also ruled that sin&e neither the respondent nor the uni&ipality of Binmaley owns Lot 06$, there
is no basis for the monetary awards granted by the trial &ourt.


"7e Issue

-he issue in this &ase is whether 9esolution <os. !5# and !53 of the Sangguniang Bayan of Binmaley are valid.


"7e Ru9:&4 o; 57e !our5

-he petition has no merit.

Both respondent and the uni&ipality of Binmaley admit that they do not have title over Lot 06$. -he .ssistant Chief of
the .ggregate Survey Se&tion of the Land anagement Servi&es in 9egion + testi:ed that no do&ument of ownership for Lot
06$ was ever presented to their oC&e.
L"M

9espondent &laims Lot 06$ based on its alleged open, &ontinuous, adverse, and uninterrupted possession of Lot 06$.
Gowever, the re&ords reveal otherwise. Even the witnesses for respondent testi:ed that Lot 06$ was used by the people as
pathway, par*ing spa&e, and playground.
L!5M

'n the other hand, the uni&ipality of Binmaley alleged that it is the sole &laimant of Lot 06$ based on the ,roperty
+denti:&ation ap, -a/ apping Control 9oll of the uni&ipality of Binmaley, and the Lot 1ata Computation in the name of the
uni&ipality of Binmaley. Gowever, these do&uments merely show that the uni&ipality of Binmaley is a mere &laimant of Lot
06$. +n fa&t, the &hief of Survey 1ivision of the 1epartment of Environment and <atural 9esour&es, San >ernando City, La
;nion testi:ed that the &adastral survey
L!!M
of Lot 06$, whi&h was surveyed for the uni&ipality of Binmaley in !"4", had not
been approved.
L!2M
-he &adastral survey was based on the Lot 1ata Computation
L!6M
of Lot 06$ whi&h was li*ewise &ontra&ted
by the uni&ipality of Binmaley in !"4".

-he re&ords show that Lot 06$ is used as a pathway going to the s&hool, the seminary, or the &hur&h, whi&h are all
lo&ated on lots ad8oined to Lot 06$.
L!#M
Lot 06$ was also used for par*ing and playground.
L!3M
+n other words, Lot 06$ was used
by the publi& in general.

Both respondent and the uni&ipality of Binmaley failed to prove their right over Lot 06$. Sin&e Lot 06$ has never been
a&quired by anyone through pur&hase or grant or any other mode of a&quisition, Lot 06$ remains part of the publi& domain
and is owned by the state. .s held in =on$ =o8 *. Da*idE
L!$M

-here being no eviden&e whatever that the property in question was ever a&quired by the appli&ants or their
an&estors either by &omposition title from the Spanish Dovernment or by possessory information title or by
any other means for the a&quisition of publi& lands, the property must be held to be publi& domain. >or it is
well settled Wthat no publi& land &an be a&quired by private persons without any grant, e/press or implied,
from the government.X +t is indispensable then that there be a showing of a title from the state or any other
mode of a&quisition re&ognized by law. -he most re&ent restatement of the do&trine, found in an opinion of
(usti&e (.B.L. 9eyes followsE W-he appli&ant, having failed to establish his right or title over the northern
portion of Lot <o. #$6 involved in the present &ontroversy, and there being no showing that the same has
been a&quired by any private person from the Dovernment, either by pur&hase or by grant, the property is
and remains part of the publi& domain.X


-his is in a&&ordan&e with the 9egalian do&trine whi&h holds that the state owns all lands and waters of the publi&
domain.
L!0M
-hus, under .rti&le Y++, Se&tion 2 of the ConstitutionE W.ll lands of the publi& domain, waters, minerals, &oal,
petroleum, and other mineral oils, all for&es of potential energy, :sheries, forests or timber, wildlife, Kora and fauna, and
other natural resour&es are owned by the state.X

uni&ipal &orporations &annot appropriate to themselves publi& or government lands without prior grant from the
government.
L!4M
Sin&e Lot 06$ is owned by the state, the Sangguniang Bayan of Binmaley e/&eeded its authority in passing
9esolution <os. !5# and !53. -hus, 9esolution <os. !5# and !53 are void and &onsequently, the &ontra&t of lease between
the uni&ipality of Binmaley and the 9ural Ban* of .nda over a portion of Lot 06$ is also void.



3(EREFORE, we ,EN1 the petition. 7e $FFIR- the 1e&ision dated !3 '&tober 255! and the 9esolution dated 26
.ugust 2552 of the Court of .ppeals.

#O OR,ERE,.
D.9. <o. "25!6 (uly 23, !""5
S.L%.1'9 G. L.;9EL, petitioner,
vs.
9.'< D.9C+., as head of the .sset ,rivatization -rust, 9.;L .<DL.,;S, as Se&retary of >oreign .Bairs, and C.-.L+<'
.C.9.+D, as E/e&utive Se&retary, respondents.
D.9. <o. "25#0 (uly 23, !""5
1+'<+S+' S. '(E1., petitioner,
vs.
EYEC;-+%E SEC9E-.9H .C.9.+D, (9., .SSE-S ,9+%.-+J.-+'< -9;S- CG.+9.< 9.'< -. D.9C+., .B.SS.1'9 9.'<
1EL 9'S.9+', et al., as members of the ,9+<C+,.L .<1 B+11+<D C'+--EES '< -GE ;-+L+J.-+'<Z1+S,'S+-+'< ,E-+-+'<
'> ,G+L+,,+<E D'%E9<E<- ,9',E9-+ES +< (.,.<,respondents.
+rturo #. Tolentino for petitioner in 3D105.

D;-+E99EJ, (9., ".E
-hese are two petitions for prohibition see*ing to en8oin respondents, their representatives and agents from pro&eeding with
the bidding for the sale of the 6,!0" square meters of land at 65$ 9oppongi, 3-Chome inato-*u -o*yo, (apan s&heduled on
>ebruary 2!, !""5. 7e granted the prayer for a temporary restraining order eBe&tive >ebruary 25, !""5. 'ne of the
petitioners ?in D.9. <o. "25#0@ li*ewise prayes for a writ of mandamus to &ompel the respondents to fully dis&lose to the
publi& the basis of their de&ision to push through with the sale of the 9oppongi property inspire of strong publi& opposition
and to e/plain the pro&eedings whi&h eBe&tively prevent the parti&ipation of >ilipino &itizens and entities in the bidding
pro&ess.
-he oral arguments in D.9. <o. "25!6, Laurel *. Garcia et al. were heard by the Court on ar&h !6, !""5. .fter D.9. <o.
"25#0, <jeda *. Secretary #acarai$ et al. was :led, the respondents were required to :le a &omment by the Court)s
resolution dated >ebruary 22, !""5. -he two petitions were &onsolidated on ar&h 20, !""5 when the memoranda of the
parties in the Laurel &ase were deliberated upon.
-he Court &ould not a&t on these &ases immediately be&ause the respondents :led a motion for an e/tension of thirty ?65@
days to :le &omment in D.9. <o. "25#0, followed by a se&ond motion for an e/tension of another thirty ?65@ days whi&h we
granted on ay 4, !""5, a third motion for e/tension of time granted on ay 2#, !""5 and a fourth motion for e/tension of
time whi&h we granted on (une 3, !""5 but &alling the attention of the respondents to the length of time the petitions have
been pending. .fter the &omment was :led, the petitioner in D.9. <o. "25#0 as*ed for thirty ?65@ days to :le a reply. 7e noted
his motion and resolved to de&ide the two ?2@ &ases.
+
-he sub8e&t property in this &ase is one of the four ?#@ properties in (apan a&quired by the ,hilippine government under the
9eparations .greement entered into with (apan on ay ", !"3$, the other lots beingE
?!@ -he <ampeidai ,roperty at !!-2# <ampeidai-ma&hi, Shibuya-*u, -o*yo whi&h has an area of appro/imately 2,#4"."$
square meters, and is at present the site of the ,hilippine Embassy Chan&eryA
?2@ -he Oobe Commer&ial ,roperty at $6 <aniwa-&ho, Oobe, with an area of around 0$#.02 square meters and &ategorized as
a &ommer&ial lot now being used as a warehouse and par*ing lot for the &onsulate staBA and
?6@ -he Oobe 9esidential ,roperty at !-"45-2 'banoyama-&ho, Shinohara, <ada-*u, Oobe, a residential lot whi&h is now
va&ant.
-he properties and the &apital goods and servi&es pro&ured from the (apanese government for national development pro8e&ts
are part of the indemni:&ation to the >ilipino people for their losses in life and property and their suBering during 7orld 7ar ++.
-he 9eparations .greement provides that reparations valued at [335 million would be payable in twenty ?25@ years in
a&&ordan&e with annual s&hedules of pro&urements to be :/ed by the ,hilippine and (apanese governments ?.rti&le 2,
9eparations .greement@. 9ep. .&t <o. !04", the 9eparations Law, pres&ribes the national poli&y on pro&urement and
utilization of reparations and development loans. -he pro&urements are divided into those for use by the $o*ernment
sector and those for pri*ate parties in pro8e&ts as the then <ational E&onomi& Coun&il shall determine. -hose intended for the
private se&tor shall be made available by sale to >ilipino &itizens or to one hundred ?!55P@ per&ent >ilipino-owned entities in
national development pro8e&ts.
-he 9oppongi property was a&quired from the (apanese government under the Se&ond Hear S&hedule and listed under the
heading =Dovernment Se&tor=, through 9eparations Contra&t <o. 655 dated (une 20, !"34. -he 9oppongi property &onsists of
the land and building =for the Chan&ery of the ,hilippine Embassy= ?.nne/ -1 to emorandum for ,etitioner, p. 356@. .s
intended, it be&ame the site of the ,hilippine Embassy until the latter was transferred to <ampeidai on (uly 22, !"0$ when the
9oppongi building needed ma8or repairs. 1ue to the failure of our government to provide ne&essary funds, the 9oppongi
property has remained undeveloped sin&e that time.
. proposal was presented to ,resident Corazon C. .quino by former ,hilippine .mbassador to (apan, Carlos (. %aldez, to ma*e
the property the sub8e&t of a lease agreement with a (apanese :rm - Oa8ima Corporation F whi&h shall &onstru&t two ?2@
buildings in 9oppongi and one ?!@ building in <ampeidai and renovate the present ,hilippine Chan&ery in <ampeidai. -he
&onsideration of the &onstru&tion would be the lease to the foreign &orporation of one ?!@ of the buildings to be &onstru&ted in
9oppongi and the two ?2@ buildings in <ampeidai. -he other building in 9oppongi shall then be used as the ,hilippine Embassy
Chan&ery. .t the end of the lease period, all the three leased buildings shall be o&&upied and used by the ,hilippine
government. <o &hange of ownership or title shall o&&ur. ?See .nne/ =B= to 9eply to Comment@ -he ,hilippine government
retains the title all throughout the lease period and thereafter. Gowever, the government has not a&ted favorably on this
proposal whi&h is pending approval and rati:&ation between the parties. +nstead, on .ugust !!, !"4$, ,resident .quino
&reated a &ommittee to study the dispositionZutilization of ,hilippine government properties in -o*yo and Oobe, (apan through
.dministrative 'rder <o. 6, followed by .dministrative 'rders <umbered 6-., B, C and 1.
'n (uly 23, !"40, the ,resident issued E/e&utive 'rder <o. 2"$ entitling non->ilipino &itizens or entities to avail of separations)
&apital goods and servi&es in the event of sale, lease or disposition. -he four properties in (apan in&luding the 9oppongi were
spe&i:&ally mentioned in the :rst =7hereas= &lause.
.midst opposition by various se&tors, the E/e&utive bran&h of the government has been pushing, with great vigor, its de&ision
to sell the reparations properties starting with the 9oppongi lot. -he property has twi&e been set for bidding at a minimum
Koor pri&e of [223 million. -he :rst bidding was a failure sin&e only one bidder quali:ed. -he se&ond one, after
postponements, has not yet materialized. -he last s&heduled bidding on >ebruary 2!, !""5 was restrained by his Court. Later,
the rules on bidding were &hanged su&h that the [223 million Koor pri&e be&ame merely a suggested Koor pri&e.
-he Court :nds that ea&h of the herein petitions raises distin&t issues. -he petitioner in D.9. <o. "25!6 ob8e&ts to the
alienation of the 9oppongi property to anyone while the petitioner in D.9. <o. "25#0 adds as a prin&ipal ob8e&tion the alleged
un8usti:ed bias of the ,hilippine government in favor of selling the property to non->ilipino &itizens and entities. -hese
petitions have been &onsolidated and are resolved at the same time for the ob8e&tive is the same - to stop the sale of the
9oppongi property.
-he petitioner in D.9. <o. "25!6 raises the following issuesE
?!@ Can the 9oppongi property and others of its *ind be alienated by the ,hilippine DovernmentNA and
?2@ 1oes the Chief E/e&utive, her oC&ers and agents, have the authority and 8urisdi&tion, to sell the 9oppongi propertyN
,etitioner 1ionisio '8eda in D.9. <o. "25#0, apart from questioning the authority of the government to alienate the 9oppongi
property assails the &onstitutionality of E/e&utive 'rder <o. 2"$ in ma*ing the property available for sale to non->ilipino
&itizens and entities. Ge also questions the bidding pro&edures of the Committee on the ;tilization or 1isposition of ,hilippine
Dovernment ,roperties in (apan for being dis&riminatory against >ilipino &itizens and >ilipino-owned entities by denying them
the right to be informed about the bidding requirements.
++
+n G.R. No. 3D105, petitioner Laurel asserts that the 9oppongi property and the related lots were a&quired as part of the
reparations from the (apanese government for diplomati& and &onsular use by the ,hilippine government. %i&e-,resident
Laurel states that the 9oppongi property is &lassi:ed as one of publi& dominion, and not of private ownership under .rti&le
#25 of the Civil Code ?See infra@.
-he petitioner submits that the 9oppongi property &omes under =property intended for publi& servi&e= in paragraph 2 of the
above provision. Ge states that being one of publi& dominion, no ownership by any one &an atta&h to it, not even by the State.
-he 9oppongi and related properties were a&quired for =sites for &han&ery, diplomati&, and &onsular quarters, buildings and
other improvements= ?Se&ond Hear 9eparations S&hedule@. -he petitioner states that they &ontinue to be intended for a
ne&essary servi&e. -hey are held by the State in anti&ipation of an opportune use. ?Citing 6 anresa $3-$$@. Gen&e, it &annot
be appropriated, is outside the &ommer&e of man, or to put it in more simple terms, it &annot be alienated nor be the sub8e&t
matter of &ontra&ts ?Citing uni&ipality of Cavite v. 9o8as, 65 ,hil. 25 L!"!3M@. <oting the non-use of the 9oppongi property at
the moment, the petitioner avers that the same remains property of publi& dominion so long as the government has not used
it for other purposes nor adopted any measure &onstituting a removal of its original purpose or use.
-he respondents, for their part, refute the petitioner)s &ontention by saying that the sub8e&t property is not governed by our
Civil Code but by the laws of (apan where the property is lo&ated. -hey rely upon the rule of le> situs whi&h is used in
determining the appli&able law regarding the a&quisition, transfer and devolution of the title to a property. -hey also invo*e
'pinion <o. 2!, Series of !"44, dated (anuary 20, !"44 of the Se&retary of (usti&e whi&h used the le> situs in e/plaining the
inappli&ability of ,hilippine law regarding a property situated in (apan.
-he respondents add that even assuming for the sa*e of argument that the Civil Code is appli&able, the 9oppongi property
has &eased to be&ome property of publi& dominion. +t has be&ome patrimonial property be&ause it has not been used for
publi& servi&e or for diplomati& purposes for over thirteen ?!6@ years now ?Citing .rti&le #22, Civil Code@ and be&ause
the intention by the E/e&utive 1epartment and the Congress to con*ert it to pri*ate use has been manifested by overt a&ts,
su&h as, among othersE ?!@ the transfer of the ,hilippine Embassy to <ampeidai ?2@ the issuan&e of administrative orders for
the possibility of alienating the four government properties in (apanA ?6@ the issuan&e of E/e&utive 'rder <o. 2"$A ?#@ the
ena&tment by the Congress of 9ep. .&t <o. $$30 Lthe Comprehensive .grarian 9eform LawM on (une !5, !"44 whi&h &ontains
a provision stating that funds may be ta*en from the sale of ,hilippine properties in foreign &ountriesA ?3@ the holding of the
publi& bidding of the 9oppongi property but whi&h failedA ?$@ the deferment by the Senate in 9esolution <o. 33 of the bidding
to a future dateA thus an a&*nowledgment by the Senate of the government)s intention to remove the 9oppongi property from
the publi& servi&e purposeA and ?0@ the resolution of this Court dismissing the petition in <jeda *. Biddin$ Committee et al.,
D.9. <o. 40#04 whi&h sought to en8oin the se&ond bidding of the 9oppongi property s&heduled on ar&h 65, !"4".
+++
+n G.R. No. 3919F, petitioner '8eda on&e more as*s this Court to rule on the &onstitutionality of E/e&utive 'rder <o. 2"$. Ge
had earlier :led a petition in D.9. <o. 40#04 whi&h the Court dismissed on .ugust !, !"4". Ge now avers that the e/e&utive
order &ontravenes the &onstitutional mandate to &onserve and develop the national patrimony stated in the ,reamble of the
!"40 Constitution. +t also allegedly violatesE
?!@ -he reservation of the ownership and a&quisition of alienable lands of the publi& domain to >ilipino &itizens. ?Se&tions 2
and 6, .rti&le Y++, ConstitutionA Se&tions 22 and 26 of Commonwealth .&t !#!@.iGtGc@aHsl
?2@ -he preferen&e for >ilipino &itizens in the grant of rights, privileges and &on&essions &overing the national e&onomy and
patrimony ?Se&tion !5, .rti&le %+, Constitution@A
?6@ -he prote&tion given to >ilipino enterprises against unfair &ompetition and trade pra&ti&esA
?#@ -he guarantee of the right of the people to information on all matters of publi& &on&ern ?Se&tion 0, .rti&le +++, Constitution@A
?3@ -he prohibition against the sale to non->ilipino &itizens or entities not wholly owned by >ilipino &itizens of &apital goods
re&eived by the ,hilippines under the 9eparations .&t ?Se&tions 2 and !2 of 9ep. .&t <o. !04"@A and
?$@ -he de&laration of the state poli&y of full publi& dis&losure of all transa&tions involving publi& interest ?Se&tion 24, .rti&le
+++, Constitution@.
,etitioner '8eda warns that the use of publi& funds in the e/e&ution of an un&onstitutional e/e&utive order is a misappli&ation
of publi& funds Ge states that sin&e the details of the bidding for the 9oppongi property were ne*er pu&licly disclosed until
>ebruary !3, !""5 ?or a few days before the s&heduled bidding@, the bidding guidelines are available only in -o*yo, and the
a&&omplishment of requirements and the sele&tion of quali:ed bidders should be done in -o*yo, interested >ilipino &itizens or
entities owned by them did not have the &han&e to &omply with ,ur&hase 'Ber 9equirements on the 9oppongi. 7orse, the
9oppongi shall be sold for a minimum pri&e of [223 million from whi&h pri&e &apital gains ta/ under (apanese law of about 35
to 05P of the Koor pri&e would still be dedu&ted.
+%
-he petitioners and respondents in both &ases do not dispute the fa&t that the 9oppongi site and the three related properties
were through reparations agreements, that these were assigned to the government se&tor and that the 9oppongi property
itself was spe&i:&ally designated under the 9eparations .greement to house the ,hilippine Embassy.
-he nature of the 9oppongi lot as property for publi& servi&e is e/pressly spelled out. +t is di&tated by the terms of the
9eparations .greement and the &orresponding &ontra&t of pro&urement whi&h bind both the ,hilippine government and the
(apanese government.
-here &an be no doubt that it is of publi& dominion unless it is &onvin&ingly shown that the property has be&ome patrimonial.
-his, the respondents have failed to do.
.s property of publi& dominion, the 9oppongi lot is outside the &ommer&e of man. +t &annot be alienated. +ts ownership is a
spe&ial &olle&tive ownership for general use and en8oyment, an appli&ation to the satisfa&tion of &olle&tive needs, and resides
in the so&ial group. -he purpose is not to serve the State as a 8uridi&al person, but the &itizensA it is intended for the &ommon
and publi& welfare and &annot be the ob8e&t of appropration. ?-a*en from 6 anresa, $$-$"A &ited in -olentino, Commentaries
on the Civil Code of the ,hilippines, !"$6 Edition, %ol. ++, p. 2$@.
-he appli&able provisions of the Civil Code areE
.9-. #!". ,roperty is either of publi& dominion or of private ownership.
.9-. #25. -he following things are property of publi& dominion
?!@ -hose intended for publi& use, su&h as roads, &anals, rivers, torrents, ports and bridges &onstru&ted by
the State, ban*s shores roadsteads, and others of similar &hara&terA
?2@ -hose whi&h belong to the State, without being for publi& use, and are intended for some publi& servi&e or
for the development of the national wealth.
.9-. #2!. .ll other property of the State, whi&h is not of the &hara&ter stated in the pre&eding arti&le, is
patrimonial property.
-he 9oppongi property is &orre&tly &lassi:ed under paragraph 2 of .rti&le #25 of the Civil Code as property belonging to the
State and intended for some publi& servi&e.
Gas the intention of the government regarding the use of the property been &hanged be&ause the lot has been +dle for some
yearsN Gas it be&ome patrimonialN
-he fa&t that the 9oppongi site has not been used for a long time for a&tual Embassy servi&e does not automati&ally &onvert it
to patrimonial property. .ny su&h &onversion happens only if the property is withdrawn from publi& use ?Cebu '/ygen and
.&etylene Co. v. Ber&illes, $$ SC9. #4! L!"03M@. . property &ontinues to be part of the publi& domain, not available for private
appropriation or ownership until there is a formal de&laration on the part of the government to withdraw it from being su&h
?+gna&io v. 1ire&tor of Lands, !54 ,hil. 663 L!"$5M@.
-he respondents enumerate various pronoun&ements by &on&erned publi& oC&ials insinuating a &hange of intention. 7e
emphasize, however, that an abandonment of the intention to use the 9oppongi property for publi& servi&e and to ma*e it
patrimonial property under .rti&le #22 of the Civil Code must &e de:nite .bandonment &annot be inferred from the non-use
alone spe&ially if the non-use was attributable not to the government)s own deliberate and indubitable will but to a la&* of
:nan&ial support to repair and improve the property ?See Geirs of >elino Santiago v. Lazaro, !$$ SC9. 6$4 L!"44M@.
.bandonment must be a &ertain and positive a&t based on &orre&t legal premises.
. mere transfer of the ,hilippine Embassy to <ampeidai in !"0$ is not relinquishment of the 9oppongi property)s original
purpose. Even the failure by the government to repair the building in 9oppongi is not abandonment sin&e as earlier stated,
there simply was a shortage of government funds. -he re&ent .dministrative 'rders authorizing a study of the status and
&onditions of government properties in (apan were merely dire&tives for investigation but did not in any way signify a &lear
intention to dispose of the properties.
E/e&utive 'rder <o. 2"$, though its title de&lares an =authority to sell=, does not have a provision in its te/t e/pressly
authorizing the sale of the four properties pro&ured from (apan for the government se&tor. -he e/e&utive order does not
de&lare that the properties lost their publi& &hara&ter. +t merely intends to ma*e the properties a*aila&le to foreigners and not
to >ilipinos alone in case of a sale, lease or other disposition. +t merely eliminates the restri&tion under 9ep. .&t <o. !04" that
reparations goods may be sold only to >ilipino &itizens and one hundred ?!55P@ per&ent >ilipino-owned entities. -he te/t of
E/e&utive 'rder <o. 2"$ providesE
Se&tion !. -he provisions of 9epubli& .&t <o. !04", as amended, and of other laws to the &ontrary
notwithstanding, the above-mentioned properties &an be made available for sale, lease or any other manner
of disposition to non->ilipino &itizens or to entities owned by non->ilipino &itizens.
E/e&utive 'rder <o. 2"$ is based on the wrong premise or assumption that the 9oppongi and the three other properties were
earlier &onverted into alienable real properties. .s earlier stated, 9ep. .&t <o. !04" diBerentiates the pro&urements for the
government se&tor and the private se&tor ?Se&tions 2 and !2, 9ep. .&t <o. !04"@. 'nly the private se&tor properties &an be
sold to end-users who must be >ilipinos or entities owned by >ilipinos. +t is this nationality provision whi&h was amended by
E/e&utive 'rder <o. 2"$.
Se&tion $6 ?&@ of 9ep. .&t <o. $$30 ?the C.9, Law@ whi&h provides as one of the sour&es of funds for its implementation, the
pro&eeds of the disposition of the properties of the Dovernment in foreign &ountries, did not withdraw the 9oppongi property
from being &lassi:ed as one of publi& dominion when it mentions ,hilippine properties abroad. Se&tion $6 ?&@ refers to
properties whi&h are alienable and not to those reserved for publi& use or servi&e. 9ep .&t <o. $$30, therefore, does not
authorize the E/e&utive 1epartment to sell the 9oppongi property. +t merely enumerates possible sour&es of future funding to
augment ?as and when needed@ the .grarian 9eform >und &reated under E/e&utive 'rder <o. 2"". 'bviously any property
outside of the &ommer&e of man &annot be tapped as a sour&e of funds.
-he respondents try to get around the publi& dominion &hara&ter of the 9oppongi property by insisting that (apanese law and
not our Civil Code should apply.
+t is e/&eedingly strange why our top government oC&ials, of all people, should be the ones to insist that in the sale of
e/tremely valuable government property, (apanese law and not ,hilippine law should prevail. -he (apanese law - its &overage
and eBe&ts, when ena&ted, and e/&eptions to its provision F is not presented to the Court +t is simply asserted that the le>
loci rei sitae or (apanese law should apply without stating what that law provides. +t is a ed on faith that (apanese law would
allow the sale.
7e see no reason why a &onKi&t of law rule should apply when no &onKi&t of law situation e/ists. . &onKi&t of law situation
arises only whenE ?!@ -here is a dispute over the title or o(ners%ip of an immovable, su&h that the &apa&ity to ta*e and
transfer immovables, the formalities of &onveyan&e, the essential validity and eBe&t of the transfer, or the interpretation and
eBe&t of a &onveyan&e, are to be determined ?See Salonga, Pri*ate !nternational La(, !"4! ed., pp. 600-646@A and ?2@ .
foreign law on land ownership and its &onveyan&e is asserted to &onKi&t with a domesti& law on the same matters. Gen&e, the
need to determine whi&h law should apply.
+n the instant &ase, none of the above elements e/ists.
-he issues are not &on&erned with validity of ownership or title. -here is no question that the property belongs to the
,hilippines. -he issue is the authority of the respondent oC&ials to validly dispose of property belonging to the State. .nd the
validity of the pro&edures adopted to eBe&t its sale. -his is governed by ,hilippine Law. -he rule of le> situs does not apply.
-he assertion that the opinion of the Se&retary of (usti&e sheds light on the relevan&e of the le> situsrule is mispla&ed. -he
opinion does not ta&*le the aliena&ility of the real properties pro&ured through reparations nor the e/isten&e in what body of
the authority to sell them. +n dis&ussing who are &apableof ac'uirin$ the lots, the Se&retary merely e/plains that it is the
foreign law whi&h should determine(%o can ac'uire t%e properties so that the &onstitutional limitation on a&quisition of lands
of the publi& domain to >ilipino &itizens and entities wholly owned by >ilipinos is inappli&able. 7e see no point in belaboring
whether or not this opinion is &orre&t. 7hy should we dis&uss who &an a&quire the 9oppongi lot when there is no showing that
it &an be soldN
-he subsequent approval on '&tober #, !"44 by ,resident .quino of the re&ommendation by the investigating &ommittee to
sell the 9oppongi property was premature or, at the very least, &onditioned on a valid &hange in the publi& &hara&ter of the
9oppongi property. oreover, the approval does not have the for&e and eBe&t of law sin&e the ,resident already lost her
legislative powers. -he Congress had already &onvened for more than a year.
.ssuming for the sa*e of argument, however, that the 9oppongi property is no longer of publi& dominion, there is another
obsta&le to its sale by the respondents.
T%ere is no la( aut%orizin$ its con*eyance.
Se&tion 0" ?f@ of the 9evised .dministrative Code of !"!0 provides
Se&tion 0" ?f @ Con*eyances and contracts to (%ic% t%e Go*ernment is a party. I +n &ases in whi&h the
Dovernment of the 9epubli& of the ,hilippines is a party to any deed or other instrument &onveying the title
to real estate or to any other property the value of whi&h is in e/&ess of one hundred thousand pesos, the
respe&tive 1epartment Se&retary shall prepare the ne&essary papers whi&h, together with the proper
re&ommendations, s%all &e su&mitted to t%e Con$ress of t%e P%ilippines for appro*al &y t%e same. Su&h
deed, instrument, or &ontra&t shall be e/e&uted and signed by the ,resident of the ,hilippines on behalf of
the Dovernment of the ,hilippines unless the Dovernment of the ,hilippines unless the authority therefor be
e/pressly vested by law in another oC&er. ?Emphasis supplied@
-he requirement has been retained in Se&tion #4, Boo* + of the .dministrative Code of !"40 ?E/e&utive 'rder <o. 2"2@.
SEC. #4. <Jcial +ut%orized to Con*ey Real Property. F 7henever real property of the Dovernment
is aut%orized &y la( to &e con*eyed the deed of &onveyan&e shall be e/e&uted in behalf of the government
by the followingE
?!@ >or property belonging to and titled in the name of the 9epubli& of the ,hilippines, by the ,resident,
unless the authority therefor is e/pressly vested by law in another oC&er.
?2@ >or property belonging to the 9epubli& of the ,hilippines but titled in the name of any politi&al subdivision
or of any &orporate agen&y or instrumentality, by the e/e&utive head of the agen&y or instrumentality.
?Emphasis supplied@
+t is not for the ,resident to &onvey valuable real property of the government on his or her own sole will. .ny su&h &onveyan&e
must be authorized and approved by a law ena&ted by the Congress. +t requires e/e&utive and legislative &on&urren&e.
9esolution <o. 33 of the Senate dated (une 4, !"4", as*ing for the deferment of the sale of the 9oppongi property does not
withdraw the property from publi& domain mu&h less authorize its sale. +t is a mere resolutionA it is not a formal de&laration
abandoning the publi& &hara&ter of the 9oppongi property. +n fa&t, the Senate Committee on >oreign 9elations is &ondu&ting
hearings on Senate 9esolution <o. 06# whi&h raises serious poli&y &onsiderations and &alls for a fa&t-:nding investigation of
the &ir&umstan&es behind the de&ision to sell the ,hilippine government properties in (apan.
-he resolution of this Court in <jeda *. Biddin$ Committee et al. supra did not pass upon the &onstitutionality of E/e&utive
'rder <o. 2"$. Contrary to respondents) assertion, we did not uphold the authority of the ,resident to sell the 9oppongi
property. -he Court stated that the &onstitutionality of the e/e&utive order was not the real issue and that resolving the
&onstitutional question was =neither ne&essary nor :nally determinative of the &ase.= -he Court noted that =L7Mhat petitioner
ultimately questions is the use of the pro&eeds of the disposition of the 9oppongi property.= +n emphasizing that =the de&ision
of the E/e&utive to dispose of the 9oppongi property to :nan&e the C.9, ... &annot be questioned= in view of Se&tion $6 ?&@ of
9ep. .&t <o. $$30, the Court did not a&*nowledge the fa&t that the property be&ame alienable nor did it indi&ate that the
,resident was authorized to dispose of the 9oppongi property. -he resolution should be read to mean that in &ase the
9oppongi property is re-&lassi:ed to be patrimonial and alienable by authority of law, the pro&eeds of a sale may be used for
national e&onomi& development pro8e&ts in&luding the C.9,.
oreover, the sale in !"4" did not materialize. -he petitions before us question the proposed !""5 sale of the 9oppongi
property. 7e are resolving the issues raised in these petitions, not the issues raised in !"4".
Gaving de&lared a need for a law or formal de&laration to withdraw the 9oppongi property from publi& domain to ma*e it
alienable and a need for legislative authority to allow the sale of the property, we see no &ompelling reason to ta&*le the
&onstitutional issues raised by petitioner '8eda.
-he Court does not ordinarily pass upon &onstitutional questions unless these questions are properly raised in appropriate
&ases and their resolution is ne&essary for the determination of the &ase ?,eople v. %era, $3 ,hil. 3$ L!"60M@. -he Court will not
pass upon a &onstitutional question although properly presented by the re&ord if the &ase &an be disposed of on some other
ground su&h as the appli&ation of a statute or general law ?Siler v. Louisville and <ashville 9. Co., 2!6 ;.S. !03, L!"5"M,
9ailroad Commission v. ,ullman Co., 6!2 ;.S. #"$ L!"#!M@.
-he petitioner in D.9. <o. "25!6 states why the 9oppongi property should not be soldE
-he 9oppongi property is not 8ust li*e any pie&e of property. +t was given to the >ilipino people in reparation
for the lives and blood of >ilipinos who died and suBered during the (apanese military o&&upation, for the
suBering of widows and orphans who lost their loved ones and *indred, for the homes and other properties
lost by &ountless >ilipinos during the war. -he -o*yo properties are a monument to the bravery and sa&ri:&e
of the >ilipino people in the fa&e of an invaderA li*e the monuments of 9izal, Uuezon, and other >ilipino
heroes, we do not e/pe&t e&onomi& or :nan&ial bene:ts from them. But who would thin* of selling these
monumentsN >ilipino honor and national dignity di&tate that we *eep our properties in (apan as memorials to
the &ountless >ilipinos who died and suBered. Even if we should be&ome paupers we should not thin* of
selling them. >or it would be as if we sold the lives and blood and tears of our &ountrymen. ?9ollo- D.9. <o.
"25!6, p.!#0@
-he petitioner in D.9. <o. "25#0 also statesE
9oppongi is no ordinary property. +t is one &eded by the (apanese government in atonement for its past
belligeren&e for the valiant sa&ri:&e of life and limb and for deaths, physi&al dislo&ation and e&onomi&
devastation the whole >ilipino people endured in 7orld 7ar ++.
+t is for what it stands for, and for what it &ould never bring ba&* to life, that its signi:&an&e today remains
undimmed, inspire of the lapse of #3 years sin&e the war ended, inspire of the passage of 62 years sin&e the
property passed on to the ,hilippine government.
9oppongi is a reminder that &annot F should not F be dissipated ... ?9ollo-"25#0, p. "@
+t is indeed true that the 9oppongi property is valuable not so mu&h be&ause of the inKated pri&es fet&hed by real property in
-o*yo but more so be&ause of its symboli& value to all >ilipinos F veterans and &ivilians ali*e. 7hether or not the 9oppongi
and related properties will eventually be sold is a poli&y determination where both the ,resident and Congress must &on&ur.
Considering the properties) importan&e and value, the laws on &onversion and disposition of property of publi& dominion must
be faithfully followed.
7GE9E>'9E, +< %+E7 '> -GE >'9ED'+<D, the petitions are D9.<-E1. . writ of prohibition is issued en8oining the
respondents from pro&eeding with the sale of the 9oppongi property in -o*yo, (apan. -he >ebruary 25, !""5 -emporary
9estraining 'rder is made ,E9.<E<-.
S' '91E9E1.
#elencio@=errera Paras Bidin Gri?o@+'uino and Re$alado "". concur.

G.R. No. 179987 #e<5e=ber 0, 2010
(EIR# OF -$RIO -$L$+$N$N, >Re<rese&5e' by #a99y $. -a9aba&a&?, ,etitioners,
vs.
REPU+LI! OF "(E P(ILIPPINE#, 9espondent.
9 E S ' L ; - + ' <
+ER#$-IN, J.:
>or our &onsideration and resolution are the motions for re&onsideration of the parties who both assail the de&ision
promulgated on .pril 2", 255", whereby we upheld the ruling of the Court of .ppeals ?C.@ denying the appli&ation of the
petitioners for the registration of a par&el of land situated in Barangay -ibig, Silang, Cavite on the ground that they had not
established by suC&ient eviden&e their right to the registration in a&&ordan&e with either Se&tion !#?!@ or Se&tion !#?2@ of
,residential 1e&ree <o. !32" ?,roperty 9egistration 1e&ree@.
.nte&edents
-he property sub8e&t of the appli&ation for registration is a par&el of land situated in Barangay -ibig, Silang Cavite, more
parti&ularly identi:ed as Lot "4$#-., Cad-#32-1, with an area of 0!,62#-square meters. 'n >ebruary 25, !""4, appli&ant ario
alabanan, who had pur&hased the property from Eduardo %elaz&o, :led an appli&ation for land registration &overing the
property in the 9egional -rial Court ?9-C@ in -agaytay City, Cavite, &laiming that the property formed part of the alienable and
disposable land of the publi& domain, and that he and his prede&essors-in-interest had been in open, &ontinuous,
uninterrupted, publi& and adverse possession and o&&upation of the land for more than 65 years, thereby entitling him to the
8udi&ial &on:rmation of his title.
!
-o prove that the property was an alienable and disposable land of the publi& domain, alabanan presented during trial a
&erti:&ation dated (une !!, 255! issued by the Community Environment and <atural 9esour&es 'C&e ?CE<9'@ of the
1epartment of Environment and <atural 9esour&es ?1E<9@, whi&h readsE
-his is to &ertify that the par&el of land designated as Lot <o. "4$# Cad #32-1, Silang Cadastre as surveyed for r. %irgilio
%elas&o lo&ated at Barangay -ibig, Silang, Cavite &ontaining an area of 2#",06# sq. meters as shown and des&ribed on the
,lan .p-5#-55"32 is veri:ed to be within the .lienable or 1isposable land per Land Classi:&ation ap <o. 65!6 established
under ,ro8e&t <o. 25-. and approved as su&h under >.' #-!$3$ on ar&h !3, !"42.
2
.fter trial, on 1e&ember 6, 2552, the 9-C rendered 8udgment granting alabananVs appli&ation for land registration, disposing
thuslyE
7GE9E>'9E, this Court hereby approves this appli&ation for registration and thus pla&es under the operation of .&t !#!, .&t
#"$ andZor ,.1. !32", otherwise *nown as ,roperty 9egistration Law, the lands des&ribed in ,lan Csd-5#-5!06!26-1, Lot
"4$#-. and &ontaining an area of Seventy 'ne -housand -hree Gundred -wenty >our ?0!,62#@ Square eters, as supported
by its te&hni&al des&ription now forming part of the re&ord of this &ase, in addition to other proofs addu&ed in the name of
.9+' .L.B.<.<, who is of legal age, >ilipino, widower, and with residen&e at unting +log, Silang, Cavite.
'n&e this 1e&ision be&omes :nal and e/e&utory, the &orresponding de&ree of registration shall forthwith issue.
S' '91E9E1.
6
-he 'C&e of the Soli&itor Deneral ?'SD@ appealed the 8udgment to the C., arguing that alabanan had failed to prove that
the property belonged to the alienable and disposable land of the publi& domain, and that the 9-C erred in :nding that he had
been in possession of the property in the manner and for the length of time required by law for &on:rmation of imperfe&t title.
'n >ebruary 26, 2550, the C. promulgated its de&ision reversing the 9-C and dismissing the appli&ation for registration of
alabanan. Citing the ruling in 9epubli& v. Gerbieto ?Gerbieto@,
#
the C. de&lared that under Se&tion !#?!@ of the ,roperty
9egistration 1e&ree, any period of possession prior to the &lassi:&ation of the land as alienable and disposable was
in&onsequential and should be e/&luded from the &omputation of the period of possession. <oting that the CE<9'-1E<9
&erti:&ation stated that the property had been de&lared alienable and disposable only on ar&h !3, !"42, %elaz&oVs
possession prior to ar&h !3, !"42 &ould not be ta&*ed for purposes of &omputing alabananVs period of possession.
1ue to alabananVs intervening demise during the appeal in the C., his heirs elevated the C.Vs de&ision of >ebruary 26, 2550
to this Court through a petition for review on &ertiorari.
-he petitioners assert that the ruling in 9epubli& v. Court of .ppeals and Corazon <aguit
3
?<aguit@ remains the &ontrolling
do&trine espe&ially if the property involved is agri&ultural land. +n this regard, <aguit ruled that any possession of agri&ultural
land prior to its de&laration as alienable and disposable &ould be &ounted in the re&*oning of the period of possession to
perfe&t title under the ,ubli& Land .&t ?Commonwealth .&t <o. !#!@ and the ,roperty 9egistration 1e&ree. -hey point out that
the ruling in Gerbieto, to the eBe&t that the de&laration of the land sub8e&t of the appli&ation for registration as alienable and
disposable should also date ba&* to (une !2, !"#3 or earlier, was a mere obiter di&tum &onsidering that the land registration
pro&eedings therein were in fa&t found and de&lared void ab initio for la&* of publi&ation of the noti&e of initial hearing.
-he petitioners also rely on the ruling in 9epubli& v. -...<. ,roperties, +n&.
$
to support their argument that the property had
been ipso 8ure &onverted into private property by reason of the open, &ontinuous, e/&lusive and notorious possession by their
prede&essors-in-interest of an alienable land of the publi& domain for more than 65 years. .&&ording to them, what was
essential was that the property had been =&onverted= into private property through pres&ription at the time of the appli&ation
without regard to whether the property sought to be registered was previously &lassi:ed as agri&ultural land of the publi&
domain.
.s earlier stated, we denied the petition for review on &ertiorari be&ause alabanan failed to establish by suC&ient eviden&e
possession and o&&upation of the property on his part and on the part of his prede&essors-in interest sin&e (une !2, !"#3, or
earlier.
,etitionersV otion for 9e&onsideration
+n their motion for re&onsideration, the petitioners submit that the mere &lassi:&ation of the land as alienable or disposable
should be deemed suC&ient to &onvert it into patrimonial property of the State. 9elying on the rulings in Spouses 1e '&ampo
v. .rlos,
0
enguito v. 9epubli&
4
and 9epubli& v. -...<. ,roperties, +n&.,
"
they argue that the re&lassi:&ation of the land as
alienable or disposable opened it to a&quisitive pres&ription under the Civil CodeA that alabanan had pur&hased the property
from Eduardo %elaz&o believing in good faith that %elaz&o and his prede&essors-in-interest had been the real owners of the
land with the right to validly transmit title and ownership thereofA that &onsequently, the ten-year period pres&ribed by .rti&le
!!6# of the Civil Code, in relation to Se&tion !#?2@ of the ,roperty 9egistration 1e&ree, applied in their favorA and that when
alabanan :led the appli&ation for registration on >ebruary 25, !""4, he had already been in possession of the land for
almost !$ years re&*oned from !"42, the time when the land was de&lared alienable and disposable by the State.
-he 9epubli&Vs otion for ,artial 9e&onsideration
-he 9epubli& see*s the partial re&onsideration in order to obtain a &lari:&ation with referen&e to the appli&ation of the rulings
in <aguit and Gerbieto.
ChieKy &iting the dissents, the 9epubli& &ontends that the de&ision has enlarged, by impli&ation, the interpretation of Se&tion
!#?!@ of the ,roperty 9egistration 1e&ree through 8udi&ial legislation. +t reiterates its view that an appli&ant is entitled to
registration only when the land sub8e&t of the appli&ation had been de&lared alienable and disposable sin&e (une !2, !"#3 or
earlier.
9uling
7e deny the motions for re&onsideration.
+n reviewing the assailed de&ision, we &onsider to be imperative to dis&uss the diBerent &lassi:&ations of land in relation to
the e/isting appli&able land registration laws of the ,hilippines.
Classi:&ations of land a&&ording to ownership
Land, whi&h is an immovable property,
!5
may be &lassi:ed as either of publi& dominion or of private ownership.
!!
Land is
&onsidered of publi& dominion if it eitherE ?a@ is intended for publi& useA or ?b@ belongs to the State, without being for publi&
use, and is intended for some publi& servi&e or for the development of the national wealth.
!2
Land belonging to the State that
is not of su&h &hara&ter, or although of su&h &hara&ter but no longer intended for publi& use or for publi& servi&e forms part of
the patrimonial property of the State.
!6
Land that is other than part of the patrimonial property of the State, provin&es, &ities
and muni&ipalities is of private ownership if it belongs to a private individual.
,ursuant to the 9egalian 1o&trine ?(ura 9egalia@, a legal &on&ept :rst introdu&ed into the &ountry from the 7est by Spain
through the Laws of the +ndies and the 9oyal Cedulas,
!#
all lands of the publi& domain belong to the State.
!3
-his means that
the State is the sour&e of any asserted right to ownership of land, and is &harged with the &onservation of su&h patrimony.
!$
.ll lands not appearing to be &learly under private ownership are presumed to belong to the State. .lso, publi& lands remain
part of the inalienable land of the publi& domain unless the State is shown to have re&lassi:ed or alienated them to private
persons.
!0
Classi:&ations of publi& lands
a&&ording to alienability
7hether or not land of the publi& domain is alienable and disposable primarily rests on the &lassi:&ation of publi& lands made
under the Constitution. ;nder the !"63 Constitution,
!4
lands of the publi& domain were &lassi:ed into three, namely,
agri&ultural, timber and mineral.
!"
Se&tion !5, .rti&le Y+% of the !"06 Constitution &lassi:ed lands of the publi& domain into
seven, spe&i:&ally, agri&ultural, industrial or &ommer&ial, residential, resettlement, mineral, timber or forest, and grazing land,
with the reservation that the law might provide other &lassi:&ations. -he !"40 Constitution adopted the &lassi:&ation under
the !"63 Constitution into agri&ultural, forest or timber, and mineral, but added national par*s.
25
.gri&ultural lands may be
further &lassi:ed by law a&&ording to the uses to whi&h they may be devoted.
2!
-he identi:&ation of lands a&&ording to their
legal &lassi:&ation is done e/&lusively by and through a positive a&t of the E/e&utive 1epartment.
22
Based on the foregoing, the Constitution pla&es a limit on the type of publi& land that may be alienated. ;nder Se&tion 2,
.rti&le Y++ of the !"40 Constitution, only agri&ultural lands of the publi& domain may be alienatedA all other natural resour&es
may not be.
.lienable and disposable lands of the State fall into two &ategories, to witE ?a@ patrimonial lands of the State, or those
&lassi:ed as lands of private ownership under .rti&le #23 of the Civil Code,
26
without limitationA and ?b@ lands of the publi&
domain, or the publi& lands as provided by the Constitution, but with the limitation that the lands must only be agri&ultural.
Consequently, lands &lassi:ed as forest or timber, mineral, or national par*s are not sus&eptible of alienation or disposition
unless they are re&lassi:ed as agri&ultural.
2#
. positive a&t of the Dovernment is ne&essary to enable su&h
re&lassi:&ation,
23
and the e/&lusive prerogative to &lassify publi& lands under e/isting laws is vested in the E/e&utive
1epartment, not in the &ourts.
2$
+f, however, publi& land will be &lassi:ed as neither agri&ultural, forest or timber, mineral or
national par*, or when publi& land is no longer intended for publi& servi&e or for the development of the national wealth,
thereby eBe&tively removing the land from the ambit of publi& dominion, a de&laration of su&h &onversion must be made in
the form of a law duly ena&ted by Congress or by a ,residential pro&lamation in &ases where the ,resident is duly authorized
by law to that eBe&t.
20
-hus, until the E/e&utive 1epartment e/er&ises its prerogative to &lassify or re&lassify lands, or until
Congress or the ,resident de&lares that the State no longer intends the land to be used for publi& servi&e or for the
development of national wealth, the 9egalian 1o&trine is appli&able.
1isposition of alienable publi& lands
Se&tion !! of the ,ubli& Land .&t ?C. <o. !#!@ provides the manner by whi&h alienable and disposable lands of the publi&
domain, i.e., agri&ultural lands, &an be disposed of, to witE
Se&tion !!. ,ubli& lands suitable for agri&ultural purposes &an be disposed of only as follows, and not otherwiseE
?!@ >or homestead settlementA
?2@ By saleA
?6@ By leaseA and
?#@ By &on:rmation of imperfe&t or in&omplete titlesA
?a@ By 8udi&ial legalizationA or
?b@ By administrative legalization ?free patent@.
-he &ore of the &ontroversy herein lies in the proper interpretation of Se&tion !!?#@, in relation to Se&tion #4?b@ of the ,ubli&
Land .&t, whi&h e/pressly requires possession by a >ilipino &itizen of the land sin&e (une !2, !"#3, or earlier, vizE
Se&tion #4. -he following-des&ribed &itizens of the ,hilippines, o&&upying lands of the publi& domain or &laiming to own any
su&h lands or an interest therein, but whose titles have not been perfe&ted or &ompleted, may apply to the Court of >irst
+nstan&e of the provin&e where the land is lo&ated for &on:rmation of their &laims and the issuan&e of a &erti:&ate of title
thereafter, under the Land 9egistration .&t, to witE
/ / / /
?b@ -hose who by themselves or through their prede&essors-in-interest have been in open, &ontinuous, e/&lusive, and
notorious possession and o&&upation of alienable and disposable lands of the publi& domain, under a bona :de &laim of
a&quisition of ownership, sin&e (une !2, !"#3, or earlier, immediately pre&eding the :ling of the appli&ations for &on:rmation
of title, e/&ept when prevented by war or for&e ma8eure. -hese shall be &on&lusively presumed to have performed all the
&onditions essential to a Dovernment grant and shall be entitled to a &erti:&ate of title under the provisions of this &hapter.
?Bold emphasis supplied@
<ote that Se&tion #4?b@ of the ,ubli& Land .&t used the words =lands of the publi& domain= or =alienable and disposable lands
of the publi& domain= to &learly signify that lands otherwise &lassi:ed, i.e., mineral, forest or timber, or national par*s, and
lands of patrimonial or private ownership, are outside the &overage of the ,ubli& Land .&t. 7hat the law does not in&lude, it
e/&ludes. -he use of the des&riptive phrase =alienable and disposable= further limits the &overage of Se&tion #4?b@ to only the
agri&ultural lands of the publi& domain as set forth in .rti&le Y++, Se&tion 2 of the !"40 Constitution. Bearing in mind su&h
limitations under the ,ubli& Land .&t, the appli&ant must satisfy the following requirements in order for his appli&ation to
&ome under Se&tion !#?!@ of the ,roperty 9egistration 1e&ree,
24
to witE
!. -he appli&ant, by himself or through his prede&essor-in-interest, has been in possession and o&&upation of the
property sub8e&t of the appli&ationA
2. -he possession and o&&upation must be open, &ontinuous, e/&lusive, and notoriousA
6. -he possession and o&&upation must be under a bona :de &laim of a&quisition of ownershipA
#. -he possession and o&&upation must have ta*en pla&e sin&e (une !2, !"#3, or earlierA and
3. -he property sub8e&t of the appli&ation must be an agri&ultural land of the publi& domain.
-a*ing into &onsideration that the E/e&utive 1epartment is vested with the authority to &lassify lands of the publi& domain,
Se&tion #4?b@ of the ,ubli& Land .&t, in relation to Se&tion !#?!@ of the ,roperty 9egistration 1e&ree, presupposes that the
land sub8e&t of the appli&ation for registration must have been already &lassi:ed as agri&ultural land of the publi& domain in
order for the provision to apply. -hus, absent proof that the land is already &lassi:ed as agri&ultural land of the publi& domain,
the 9egalian 1o&trine applies, and over&omes the presumption that the land is alienable and disposable as laid down in
Se&tion #4?b@ of the ,ubli& Land .&t. Gowever, emphasis is pla&ed on the requirement that the &lassi:&ation required by
Se&tion #4?b@ of the ,ubli& Land .&t is &lassi:&ation or re&lassi:&ation of a publi& land as agri&ultural.
-he dissent stresses that the &lassi:&ation or re&lassi:&ation of the land as alienable and disposable agri&ultural land should
li*ewise have been made on (une !2, !"#3 or earlier, be&ause any possession of the land prior to su&h &lassi:&ation or
re&lassi:&ation produ&ed no legal eBe&ts. +t observes that the :/ed date of (une !2, !"#3 &ould not be minimized or glossed
over by mere 8udi&ial interpretation or by 8udi&ial so&ial poli&y &on&erns, and insisted that the full legislative intent be
respe&ted.
7e :nd, however, that the &hoi&e of (une !2, !"#3 as the re&*oning point of the requisite possession and o&&upation was the
sole prerogative of Congress, the determination of whi&h should best be left to the wisdom of the lawma*ers. E/&ept that said
date quali:ed the period of possession and o&&upation, no other legislative intent appears to be asso&iated with the :/ing of
the date of (une !2, !"#3. .&&ordingly, the Court should interpret only the plain and literal meaning of the law as written by
the legislators.
oreover, an e/amination of Se&tion #4?b@ of the ,ubli& Land .&t indi&ates that Congress pres&ribed no requirement that the
land sub8e&t of the registration should have been &lassi:ed as agri&ultural sin&e (une !2, !"#3, or earlier. .s su&h, the
appli&antVs imperfe&t or in&omplete title is derived only from possession and o&&upation sin&e (une !2, !"#3, or earlier. -his
means that the &hara&ter of the property sub8e&t of the appli&ation as alienable and disposable agri&ultural land of the publi&
domain determines its eligibility for land registration, not the ownership or title over it.
.lienable publi& land held by a possessor, either personally or through his prede&essors-in-interest, openly, &ontinuously and
e/&lusively during the pres&ribed statutory period is &onverted to private property by the mere lapse or &ompletion of the
period.
2"
+n fa&t, by virtue of this do&trine, &orporations may now a&quire lands of the publi& domain for as long as the lands
were already &onverted to private ownership, by operation of law, as a result of satisfying the requisite period of possession
pres&ribed by the ,ubli& Land .&t.
65
+t is for this reason that the property sub8e&t of the appli&ation of alabanan need not be
&lassi:ed as alienable and disposable agri&ultural land of the publi& domain for the entire duration of the requisite period of
possession.
-o be &lear, then, the requirement that the land should have been &lassi:ed as alienable and disposable agri&ultural land at
the time of the appli&ation for registration is ne&essary only to dispute the presumption that the land is inalienable.
-he de&laration that land is alienable and disposable also serves to determine the point at whi&h pres&ription may run against
the State. -he imperfe&t or in&omplete title being &on:rmed under Se&tion #4?b@ of the ,ubli& Land .&t is title that is a&quired
by reason of the appli&antVs possession and o&&upation of the alienable and disposable agri&ultural land of the publi& domain.
7here all the ne&essary requirements for a grant by the Dovernment are &omplied with through a&tual physi&al, open,
&ontinuous, e/&lusive and publi& possession of an alienable and disposable land of the publi& domain, the possessor is
deemed to have a&quired by operation of law not only a right to a grant, but a grant by the Dovernment, be&ause it is not
ne&essary that a &erti:&ate of title be issued in order that su&h a grant be san&tioned by the &ourts.
6!
+f one follows the dissent, the &lear ob8e&tive of the ,ubli& Land .&t to ad8udi&ate and quiet titles to unregistered lands in favor
of quali:ed >ilipino &itizens by reason of their o&&upation and &ultivation thereof for the number of years pres&ribed by
law
62
will be defeated. +ndeed, we should always bear in mind that su&h ob8e&tive still prevails, as a fairly re&ent legislative
development bears out, when Congress ena&ted legislation ?9epubli& .&t <o. !5526@
66
in order to liberalize stringent
requirements and pro&edures in the ad8udi&ation of alienable publi& land to quali:ed appli&ants, parti&ularly residential lands,
sub8e&t to area limitations.
6#
'n the other hand, if a publi& land is &lassi:ed as no longer intended for publi& use or for the development of national wealth
by de&laration of Congress or the ,resident, thereby &onverting su&h land into patrimonial or private land of the State, the
appli&able provision &on&erning disposition and registration is no longer Se&tion #4?b@ of the ,ubli& Land .&t but the Civil
Code, in &on8un&tion with Se&tion !#?2@ of the ,roperty 9egistration 1e&ree.
63
.s su&h, pres&ription &an now run against the
State.
-o sum up, we now observe the following rules relative to the disposition of publi& land or lands of the publi& domain, namelyE
?!@ .s a general rule and pursuant to the 9egalian 1o&trine, all lands of the publi& domain belong to the State and are
inalienable. Lands that are not &learly under private ownership are also presumed to belong to the State and,
therefore, may not be alienated or disposedA
?2@ -he following are e/&epted from the general rule, to witE
?a@ .gri&ultural lands of the publi& domain are rendered alienable and disposable through any of the
e/&lusive modes enumerated under Se&tion !! of the ,ubli& Land .&t. +f the mode is 8udi&ial &on:rmation of
imperfe&t title under Se&tion #4?b@ of the ,ubli& Land .&t, the agri&ultural land sub8e&t of the appli&ation
needs only to be &lassi:ed as alienable and disposable as of the time of the appli&ation, provided the
appli&antVs possession and o&&upation of the land dated ba&* to (une !2, !"#3, or earlier. -hereby, a
&on&lusive presumption that the appli&ant has performed all the &onditions essential to a government grant
arises,
6$
and the appli&ant be&omes the owner of the land by virtue of an imperfe&t or in&omplete title. By
legal :&tion, the land has already &eased to be part of the publi& domain and has be&ome private property.
60
?b@ Lands of the publi& domain subsequently &lassi:ed or de&lared as no longer intended for publi& use or for
the development of national wealth are removed from the sphere of publi& dominion and are &onsidered
&onverted into patrimonial lands or lands of private ownership that may be alienated or disposed through
any of the modes of a&quiring ownership under the Civil Code. +f the mode of a&quisition is pres&ription,
whether ordinary or e/traordinary, proof that the land has been already &onverted to private ownership prior
to the requisite a&quisitive pres&riptive period is a &ondition sine qua non in observan&e of the law ?.rti&le
!!!6, Civil Code@ that property of the State not patrimonial in &hara&ter shall not be the ob8e&t of
pres&ription.
-o reiterate, then, the petitioners failed to present suC&ient eviden&e to establish that they and their prede&essors-in-interest
had been in possession of the land sin&e (une !2, !"#3. 7ithout satisfying the requisite &hara&ter and period of possession -
possession and o&&upation that is open, &ontinuous, e/&lusive, and notorious sin&e (une !2, !"#3, or earlier - the land &annot
be &onsidered ipso 8ure &onverted to private property even upon the subsequent de&laration of it as alienable and disposable.
,res&ription never began to run against the State, su&h that the land has remained ineligible for registration under Se&tion
!#?!@ of the ,roperty 9egistration 1e&ree. Li*ewise, the land &ontinues to be ineligible for land registration under Se&tion
!#?2@ of the ,roperty 9egistration 1e&ree unless Congress ena&ts a law or the ,resident issues a pro&lamation de&laring the
land as no longer intended for publi& servi&e or for the development of the national wealth.0K(p%i0
7GE9E>'9E, the Court 1E<+ES the petitioners) otion for 9e&onsideration and the respondent)s ,artial otion for
9e&onsideration for their la&* of merit.